Chile: Pension funds denounced to ILO for discrimination against women
Published on Mon, 2011-08-29 07:29
This week Chilean unions and social organizations made a report to the International Labour Organization (ILO) office in Santiago denouncing private sector pension funds for discrimination against women, a practice that had been documented in a study by the Centro de Estudios Nacionales de Desarrollo Alternativo (CENDA, the focal point of Social Watch in Chile).
Ana Bell, Vice-President of the National Association of Fiscal Employees, one of the organizations that made the denouncement, said, “When the pensions system was privatized in 1981, a scheme that amounts to serious discrimination against women went into operation. When women retire their pensions are 33% less than men who have worked the same number of years for the same pay.”
Guillermo Arthur, President of the Association of Pension Fund Administrators (AFP), argued that the reason women receive less was that they “last longer” (have greater life expectancy) so the funds have to cover more monthly payments. According to Paulina Cid, President of the Association of Women State Officials of the National Service for Women, this explanation is nothing but “barefaced arrogance". "It is shameful", because there are sectors of the population with varying life expectancies, but "only women suffer and only women are very severely discriminated against.”
As Gonzalo Cid, a CENDA economist, explained, “Although women live longer than men, there are other factors that have much greater bearing on life expectancy. People with higher incomes live much longer than people on low incomes. These data are confirmed by the National Statistics Institute. The population of Las Condes (a rich district in Santiago) live an average of nine years more than people in (the poor southern municipality of) Osorno and eight years longer than people in La Pintana (a poor district in the capital city). But when pensions are calculated this aspect is not taken into consideration”,
This week’s denouncement also alludes to a Chilean Constitutional Court decision in the case of sex and age discrimination in health insurance, and a ruling last February by the European Court of Justice that prohibits insurance companies and other similar organizations from discriminating by gender.
According to Cid, “It is clear that the pensions system, working through the private sector pension funds, is paying benefits that are less than 40 percent of people’s average income in the periods before they retire. In other words, when people retire they are poor, and it is an unacceptable solution for people who retire to be impoverished. Not only that, but the present system does not resolve the matter of pensions because more than 60 percent of the population do not retire in the private sector pension fund system but with fixed life incomes”.
Last June two CENDA researchers, Manuel Riesco and Mireya Baltra, informed the Committee to Overcome Poverty of the Chamber of Deputies (Parliament) that men who retire in the new Chilean system, which is proclaimed as a model for all Latin America to follow, are today receiving payments 33 percent higher than those of women who have contributed the same amount.
Riesco reported that women who remained in the old system have the right to retire at 60 with the same life pension as a man of 65 if they had the same salary or wage and the same number of years of contributions, regardless of their marital status or number of dependents.
But today under the private pension fund system a single man of 65 receives one third more than a single woman of 60 who has accumulated the same amount of contributions. Even if she postpones her retirement until she is 65, the pension of a man who retires under the same conditions will be one sixth higher.
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