Chilean employers propose 22 measures to improve pensions

Chile's main business chamber CPC released a study with 22 measures to improve the country's pension system.

Two of the measures proposed in the report are to increase contributions to 16% of salaries from the current 10% and raise the retirement age to 67 from 65 for men and 60 for women.

The report highlights the wide difference between the replacement rate – the percentage of salary received as pension, 32.8% for men and 28.8% for women – compared with the OECD average of 52.9% for men and 52.5% for women. However, CPC said the contribution to pensions as a percentage of salary in Chile is much lower than the OECD average of 19.7%.

"It is not necessary to modify the structure of the current pension system but change the parameters," according to the CPC.

Other measures proposed include reducing periods without contributions by extending pension payments to those entitled to unemployment insurance, the creation of an entity to periodically review the system's parameters and increasing labor flexibility.

Chile's pension system, created in 1980 and based on private pension managers known as AFPs, has become the focus of a heated national debate since last year. So far three national rallies have taken place – organized by the No More AFPs movement – demanding the replacement of the system for a pay-as-you-go scheme.

A new rally is scheduled for March 26 calling for "millions to take to the streets in order to demand a new public pension system," according to organizers.