The Research Department of the Chilean Association of AFPs published it Study Series Nos. 98 and 99, in October and November, 2015, respectively. Below is a brief overview of these documents:

1. Study Series No. 98 – Real Growth of 20% in Contributors to the AFPs in five years” -October 2015

This document highlights the following, among other items:

a. More than 93% of dependent workers contribute to the pension systems, and only 7.7% of self-employed workers do so on a voluntary basis.

b. Chile has a workforce of 8.5 million, of which 7.9 million are employed. Moreover, 9.9 million people are enrolled in the AFP system, and 5.4 million contribute on a monthly basis. When measuring pension coverage as the ratio between contributors and the total number of employed people, the national ratio is 70%.

c. The unemployment rate, a factor that significantly influences pensions, reached 6.6% in the May-June 2015 quarter.

d. The average taxable income on which workers enrolled in the AFP system contributed, is CLP 658,000 to June 2015 (approx. USD 1,037).

e. The average taxable income of contributors to the AFP grew 19.5% between June 2010 and June 2015, a real annual growth of 3.9%.

2. Study Series No. 99 – “The AFPs disclose their similarities and differences with the Pension Commission” -November 2015

In this document, the Chilean Association of AFPs states its opinion regarding the proposals for improving the Chilean pension system indicated in the report of the Pension Commission (Bravo Commission), in September 2015. The document highlights the following, among other items:

a. It shares Global Proposal A to a large extent, but disagrees with some of its mechanisms. Global Proposal A builds on the basis of the 2008 Reform, strengthening the solidarity pillar, enhancing the contributory pillar and gender equality, while maintaining the essential savings, investment, and economic growth incentives that enable the financing of future pensions.

b. Global Proposal B (which proposes the creation of a social security component, based on the solidarity between members and generations), and Global Proposal C (which seeks to reform the system to a pure PAYGO system), are not financially sustainable and would sooner or later fall into acute deficits or the reduction of pension amounts.

c. It shares the following specific proposals: (i) Strengthen the solidarity pillar; (ii) Increase the employer’s contribution rate; (iii) Gradually make it mandatory for the self-employed to contribute; (iv) Strengthen the pension contributions collection system; (v) Gradually increase the retirement age; and (vi) Promote pension education.

d. It disagrees with: (i) Allocating a fraction of 4% of employers’ contributions to a common fund; (ii) Reducing the pensions of men to improve those of women; (iii) Eliminating programmed withdrawal; (iv) Creating a State AFP; (v) Extending the bidding for new members to include a part of older members; and (vi) The costs of international intermediation of investments being assumed by the fund managers.

e. The Association of AFPs is in favor of changes that enable better pensions, while maintaining and enhancing the mixed three-pillar system.

f. It is important to improve statistics for constructing a clear diagnosis of the pension system.