Chile Vamos turns its back on the “Piñera formula” for pension reform

Last Sunday night, after a week marked by the death of former President Sebastián Piñera, the main leaders of Chile Vamos got together to organize a massive meeting on March 6, one month after the death of the former president.

The leaders of RN, the UDI and Evópoli participated in the meeting. The objective: to reflect on the issues that concerned Sebastián Piñera, in order to continue his legacy.

An important part of that legacy is the Universal Guaranteed Pension (PGU). This takes on special relevance this year, considering that in March the discussion of the pension reform proposed by the Government of President Gabriel Boric will continue.

The issue is that the PGU was not part of the program presented by Piñera when he was a candidate for his second term, since first he tried to advance with a pension reform, whose formula the Chamber of Deputies managed to overcome, but then he could not continue its processing in the Senate. We talk about the “Piñera formula“, which intended to divide fifty-fifty 6% additional contribution charged to the employer.

“We have opted for a Solomonic solution: half to the individual account to the pension savings of each worker to finance their pension and the other half to a collective pension fund to improve the pensions of the most vulnerable sectors,” said Sebastián Piñera in January 2020, although later, with the PGU approved, he would radically change his mind to align with the coalition that supported his two mandates.

The idea of ​​dividing the additional contribution into 3 and 3 was taken up by both the DC and Democrats, as well as by the Government of President Boric. However, despite the idea of ​​​​legislating the pension reform being approved, the formula, which was considered the heart of the project, was rejected, leaving a victory with a bitter taste for La Moneda and the reform as a “shell” that has yet to generate a agreement on the controversial 6%.

“We’re still halfway there“President Boric emphasized on that occasion, stating that “agreements are the way.”

The ideal time to replenish the offer

What is known so far is that the ruling party will insist on transferring part of the additional contribution to a solidarity fund, while the right will remain firm to its position.

“It is true, Piñera was the one who proposed 3 and 3. It is strange that in the tributes to his desire to reach agreements, this one was not remembered, with which the then President wanted to close the pension reform. “It would be the ideal time to replenish that unitary offer by the opposition,” he told The counter Senator José Miguel Insulza, member of the Socialist Party (PS) and member of the Finance Commission of the Upper House.

The same call was made by his counterpart from the Labor and Social Welfare Commission, Senator Gastón Saavedra (PS), who stressed that Sebastián Piñera was part of one of the most complex situations in the country in the social outbreak, but also recalled the speech of the President Boric during the state funeral. He appreciated that the former president was recognized as a democrat and that it was stated that there were “excesses” on the part of the then opposition. But, “sIt would be convenient for the front to do the same“said the socialist legislator.

Senator Saavedra called to leave the antagonistic paths and travel along a single street. In that sense, he hopes there will be “coherence” on the right.

“The tragic death of former President Piñera leaves as a legacy one of his initiatives that remained unfinished, the idea of ​​improving the pension system based on a balanced distribution of the six points that businessmen would be providing. So, we have to pick it up, or rather the right has to pick it up, because we already have enough flexibility to achieve a perfect agreement,” said Senator Gastón Saavedra.

“These are other times”

Although there have been sectors of the opposition that have shown openness on certain issues of the pension reform, especially changes to the industry, Chile Vamos has stated that there is no availability for contribution points to go to social security. There are even parliamentarians who have gone one step further, opening the discussion to the next government being the one to resolve the formula on how to improve current pensions.

“Chile Vamos is committed to ensuring that the contribution increase goes to the individual capitalization accounts of the workers. This ensures better future pensions and takes care of the demand, expressed through all opinion polls, in the sense that 6% be their property,” the senator from National Renovation (RN) told this medium. José García Ruminot, also a member of the Finance Commission of the Upper House.

To improve pensions, according to Senator García Ruminot, “a fiscal effort must be made that includes a greater contribution from public companies; better measures to reduce informality and have greater tax compliance; review, adjustments and savings of fiscal spending and, most importantly, high and sustained economic growth.”

Asked if Chile Vamos could be open to allocating additional contribution points to a solidarity fund in March, as proposed by the late former President Piñera at the time, The RN legislator emphasizes that “these are other times, other political realities,” especially after the approval of the PGU.

The senator and president of the UDI, Javier Macaya, spoke along the same lines, for whom the Piñera formula “lost validity” after the PGU was approved, which in his opinion “was capable of incorporating solidarity and improving people’s pensions.” of scarcer resources.”

Senator Macaya said that he even spoke with President Boric about the adjustments and improvements that could be made in the Chilean pension industry “without refounding it, but improving it.”

In any case, despite leaving aside the 3 and 3 formula, the UDI helmsman states that there are aspects of Piñera’s project that are still fully valid, such as the incorporation of more competition and new actors that reinforce “the freedom to choose.” ”.

It is worth mentioning that Senator Macaya has expressed the possibility of “jumping” for the next government “what we are not going to be able to advance.”

“Only the shell remained”

Also from the UDI, Senator Iván Moreira, who in March will become president of the Labor and Social Security Commission, highlighted that the “Piñera formula” was built in a very different context than today, when the PGU did not exist, which According to his calculations, it is equivalent to five contribution points. At that time, he added, the AFP withdrawals had not been made either, which—nevertheless—in his opinion were necessary.

Of President Boric’s initiative, according to Senator Moreira, “only the shell remained and there is no content, because the content that we did not like was rejected.” For this reason, he called on the Government to find another formula, although the deadlines are not clear.

Senator Moreira sees it as difficult for the reform to come out of the Senate Labor Commission before July.

“We must unite our wills, stop ideologism and understand that the world has changed,” he stated.

From Evópoli, the president of the party, Gloria Hutt, aligned herself with her peers from Chile Vamos and also maintained that the “Piñera formula” occurred in a scenario in which the PGU did not exist. “Now the PGU does exist, which is a solidarity component financed with central resources, that makes an important change,” she said.

The Evópoli helmsman also hinted that there may be other components of that bill that included the proposal of 3 and 3 that in her opinion “may be valuable to incorporate into the discussion of the proposal for the pension agreement.”

What’s coming in March

The pension reform of the Government of President Gabriel Boric is preparing for its second constitutional process, seeking agreements with the different benches of the Senate to give political viability to its amendment.

The discussion is scheduled for Wednesday, March 6 at the Labor and Social Welfare Commission.

The presidency of said commission will be in the hands of the right in March, led by Senator Iván Moreira, with a majority of opposition senators. However, Minister Jeannette Jara (PC) has stated that she does not see the change in leadership as a problem.