SANTIAGO – As of this morning, July 30, Millions of Chileans are now allowed to withdraw 10 percent from their privately-managed AFP pension funds. In the first 90 minutes, over 300,000 Chileans used the opportunity to withdraw money from their pensions, meant to alleviate financial problems during the corona-crisis. Although the entire process can be done online, thousands lined up outside AFP offices this morning.
As of 9:00 a.m. this morning, July 30, Chileans and foreigners with pension funds in the privately-managed AFP system are allowed to withdraw 10 percent of these funds. The long-awaited start of the process resulted in long lines in front of AFP offices and collapsed pension websites. Within the first hour-and-a-half, over 300,000 Chileans had opted to make withdrawals.
Eleven million Chileans are allowed to withdraw a portion of their funds and based on the movement in the first hours it appears a large majority will do so. The new law establishes that people can withdraw 10 percent, from a minimum of about US$1,300 up to a maximum of about US$5,700. Also, if a pension holder’s total savings are less than US$1,300 dollar, the pension holder can withdraw all funds; and, if 10 percent of a pension holder’s account is less than US$1,300 dollar, the pension holder is still allowed to withdraw US$1,300 dollar.
The AFPs are obliged to deposit 50 percent of the required amount within 10 working days, from the moment one applies for withdrawal. Within another 30 working days from the first payment, the other half must be deposited. Although the entire process is online, people lined up to gather information, get certain access numbers, or simply because they didn’t have internet access.
To make sure the system doesn’t crash, the AFP funds have called in the help of American tech company Amazon to assist. The AFPs have also set up a website, where people can read all information about the withdrawal process. Municipalities must also send people door-to-door to give those without internet access the opportunity to withdraw their pensions online. Foreigners who don’t have a RUT can withdraw their money using their AFP password and their Contribution Identification Number (NIC).
Editor-In-Chief Boris van der Spek is the founder of Chile Today.