The Center for National Studies of Alternative Development (CENDA) sent a letter to the Labor and Social Welfare commissions of the Senate and Finance of the Chamber of Deputies, chaired by Senator Loreto Carvajal and Representative Gael Yeomans respectively, urging them to consider joint pension and tax reforms that are currently being processed.
In the letter, CENDA—a think tank linked to the Communist Party (PC)—suggests that the main “progressive tax reform” that Chile requires is a pension reform that puts an end to the “forced transfer” of pension contributions to the private sector. , described as “atypical” by the recent OECD report on the Chilean tax system.
CENDA proposes to follow the path suggested by the International Labor Organization (ILO) and the practice of numerous countries that have eliminated these transfers in recent years. This, in his opinion, implies authorizing the voluntary return to the public social security system.
In the case of Chile, they point out, the proposal would be to allow all people affiliated with the Pension Fund Administrators (AFP) system, both active and retired, to switch to the Social Security Institute (IPS). This would include transferring your past and future pension contributions, as well as withdrawing the balance of your pension savings within a reasonable period of time.
CENDA argues that this reform is of national interest and presents immediate and definitive benefits for the more than 13 million people currently affiliated with the AFP system, as well as for the fiscal balance and the progressivity of the tax system.
Furthermore, they point out that this measure would help eliminate a large part of the State’s current debt and would have a significant positive impact in the social, economic and political spheres, while legitimizing the democratic system and reestablishing healthy social coexistence at a critical time.
Consult the CENDA letter.