The International Federation of Pension Fund Administrators (FIAP) described the more than 15,000 signatures of concerned citizens on the “NOT with my money” petition, to be voted in the Constitutional Convention of Chile, as “excellent news for the welfare of current and future retirees and the economic future of the country.” The “NOT with my money” petition seeks to protect the ownership of pension savings and establish a Universal Basic Pension financed with general taxes; guarantee the ownership of pension savings by contributors; ensure the freedom to choose a fund manager, whether public or private, and level the pensions of men and women with equal savings. This initiative could be included in the Constitution with 104 votes of the constituents in favor.

“At FIAP we are aware of the importance of introducing certain improvements in the pensions of all Chileans, in order to ensure a dignified old age for all. Nonetheless, we are also aware that international experience has shown that the PAYGO systems have deep-rooted financial unsustainability issues, due to ongoing population aging, increases in life expectancy and falling birth rates, aggravated by current high levels of informality,” said Guillermo Arthur, President of FIAP.

The Federation asserts that several countries with PAYGO systems worldwide are in fact incorporating greater individually funded components, but cannot currently make the full transition due to the high costs entailed for the State. There is a clear trend towards individually funded systems. 17 countries incorporated individual funding in 1999; 38 in 2009; 42 in 2021, and 44 will do so in 2022.

To download the full FIAP Press Release, click here.