Chilean Senate grapples with controversial proposed fourth withdrawal from pension funds

RIO DE JANEIRO, BRAZIL – The Senate is becoming a chessboard to develop the legislative strategies of the Government and the opposition to stop or approve the fourth withdrawal of pandemic aid funds from the private pension funds (AFPs). These moves are made under the logic that 26 votes are necessary for the norm to become law, and, up to now, the accounts are not favorable to this cause.

The president of the Constitution Committee, Pedro Araya (Independent), advised yesterday that it was decided to bring forward the vote to Tuesday, where everything indicates, according to the opinions already given by the parliamentarians, that it will be approved with the support of Araya himself, Alfonso de Urresti (PS) and Francisco Huenchumilla (DC), while senators Luz Ebensperger (UDI) and Rodrigo Galilea (RN) will vote against it.

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But what is more complex is the vote in the full Chamber, which will possibly be set for November 3, which would be against the withdrawal if the current scenario is maintained to give way to a mixed commission. In this last instance, the previous attempt will be made to advance in a new rescue of funds and the second advance of annuities. Negotiations within the opposition will be critical at this stage.

In this sector, Carolina Goic (DC) and Carlos Montes (PS) have already indicated that they are not in favor of a new withdrawal of funds, two of the 24 possible supports of the opposition.

Given this, it is recognized that the bet is on whether -there is room- “at least to advance in the withdrawal for the AFPs”, according to a parliamentary advisor, definitely leaving out the pensioners of life annuities, a matter in which the disagreement is much more significant.

Some senators in recent days have maintained a disturbing silence on the new twist and who, on previous occasions, have shown themselves to be opposed to the initiative. Such is the case of PPD Senator Ricardo Lagos Weber, who before the district week had pointed out that there are no reasons that justify the approval of the project, with arguments similar to those put forward by DC Senator Carolina Goic, as is the case of the implementation of the Universal IFE.

Another vote that is in doubt is that of Socialist Senator Juan Pablo Letelier. They have not pronounced themselves this week, which adds uncertainty to the vote in the Chamber.

PENSIONS ARE STILL WAITING

On the ruling party’s side, the issue of the fourth retirement and the short pension law was analyzed yesterday in the political committee. To gain time, the Government did not renew the immediate discussion of the bill that would increase the amount of the current pensions.

Therefore, it will not be voted this week in the Chamber, waiting for the definition of the new transfer of funds from the PFAs.

From the opposition in the Senate, some consider that the government’s decision is reasonable, considering that the deputies -they say- added a series of amendments that imply fiscal expenditure and a senator admits that it is unknown “where those resources could come from”.

This implies that La Moneda is taking a gamble because there will not be enough votes from the ruling party to give the green light to the controversial initiative. But nothing is inevitable because the president of RN, Senator Francisco Chahuán, when asked if he maintained his position that there would be no support from his party in favor, limited himself to say that “the RN senators will vote correctly”.

The attention is focused on Manuel José Ossandón, who -according to those close to the parliamentarian- would approve the withdrawal, something that the parliamentarian himself has confirmed, indicating that if the project is perfected, he will support it.

Senator Marcela Sabat, who faces reelection in which she competes with her colleague for the Metropolitan Region, has not given any certainty as to whether she will approve or reject it.

In the UDI, Senator Iván Moreira worries the Government because, according to Palacio, his decision is not clear. Although he may not support it, he could also abstain or not vote.

Chahuán, who is under pressure to align his bench, indicated after the political committee that the Executive is in talks with some opposition parliamentarians to take up again the long pension law, which has been held up in the Senate, knowing that it is almost impossible for it to move forward, let alone to be approved during the remainder of the current term of office.

However, some ministers pointed out that “there is no political floor” to revive it. Despite Chahuán’s good intentions, there is no room in the agenda to understand structural changes to the system in these weeks before the elections -with a second-round almost certain.

Yesterday, President Piñera again sent a message to the parliamentarians given the votes in the Senate: “We are in crucial times in this discussion, let us not destroy the pension savings, because that means destroying the welfare and security of our senior citizens”, he said.

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