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The President of the Pension Advisory Council supported the idea of moving towards a Basic Universal Pension, warning of disincentives to the formal listing, with the expansion of the Solidarity Pillar.
This is expected to be a key week with substantial progress on pension reform, which the government wants to accelerate. For this reason, this Monday the debate was resumed in the Senate Labor Committee, in a first stage regarding the Solidarity Pillar.
On the occasion, the report of the Pension Advisory Council, the technical body that by law has to pronounce on these matters, was heard, referring mainly to the effects on the labor market.
The conclusion was clear and it was pointed out that the new section that is between 60% and 80% more vulnerable and that is included within the Solidarity Pillar, will have a disincentive to formally contribute.
It was explained by the president of this technical body, the economist Carlos Díaz, who consulted by the opposition senators recognized that this disincentive does not exist if there is a universal benefit.
However, there is a counterpart. These are those people who today border the 60% most vulnerable and in many cases do not formally contribute to avoid losing the benefits, and now they would not have it. However, due to the formula in which PS benefits are paid, with a maximum ceiling, the increase in basic pensions could reduce the state contribution.
This was in fact stated by the representative of the Pensioners of the National Association of Pensioners of the Private System of Chile AG, Cristina Tapia, who supported the proposal.
In this context, the opposition senators reiterated that this conflict is reflected in the proposal that they presented months ago, as they explained Juan Pablo Letelier from PS and Carolina Goic, from DC.
In this sense, they reiterated that for them and to fulfill the urgency of La Moneda it would be more feasible to approve this increase in the PS separately, and to continue debating the rest of the reform in parallel.
Although they stressed that it is the exclusive decision of the Executive, although the UDI Senator Jacqueline Van Rysselberghe, asked to make the intentions of the debate transparent.
On Wednesday, the process of the reform will go ahead, at least during the session this Monday cleared up the issue regarding financing.
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