Chile: Lower House Approves Third Early Pension Fund Withdrawal

The Lower House approved on general terms the transitory reform that allows a third withdrawal of 10% of private pension funds (AFP), and now it will be debated again in the Commission.

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The proposal by Matías Walker (DC) and Marcos Ilabaca (PS) to establish a permanent reform to authorize the withdrawal of pension savings -by parliamentary initiative- during states of catastrophe did not receive sufficient support.

With broad support from government supporters from Chile Vamos legislators, the initiative received 122 votes in favor, 20 against, and 4 abstentions. A broad majority of the Chamber members -including government supporters- supported a measure that the Government rejects. The Government downgraded the third withdrawal progress: "It has only been a general approval."

However, the opposition formula proposing to amend the Constitution by means of a permanent article was rejected as it did not reach a 3/5 quorum of the deputies in office. The measure obtained 88 affirmative votes, 32 rejections, and 25 abstentions.

It is worth noting that such movement, submitted through an indication in committee by deputies Marcos Ilabaca (PS) and Matías Walker (DC), sought to avoid the government's attempt to resort to the Constitutional Court, a situation that the Executive has anticipated will take place.

Thus, the transitory reform was drafted similarly to the second withdrawal and will be debated from 2:30 p.m. onwards to define its articles in the Constitution Committee of the Lower House. For the same reason, a new extraordinary session was established in the Chamber at 4:30 p.m. to expedite its transfer to the Senate.

Likewise, La Moneda has publicly rejected the third withdrawal and considers formulas to look for an alternative. Among these options is the possibility of resorting to unemployment insurance, an idea proposed by the mayor of Las Condes, Joaquín Lavín (UDI), a government supporter.