Chile’s Lower House Approves Withdrawal of Pension Funds

SANTIAGO – The Chilean Lower House has approved the part of the pension bill that allows Chilean to withdraw up to 10 percent of their pension funds. In a tense session, the Chilean opposition obtained 95 votes in favor of the project, two more than the required 93 votes. The project will now get voted on in the Senate.

In what has become a decisive moment for the Piñera administration, the Chile’s lower house of Congress voted in favor of the bill that would allow Chileans to withdraw 10 percent of their pension funds; 95 members voted in favor, which is two more than the 93 needed for a constitutional reform. When the president of the lower house Diego Paulsen declared the bill approved, the opposition burst out in cheers. After the approval, Chileans took to their balconies with pots and pans to celebrate the project with a cacerolazo.

The approval means a huge victory for the opposition, as well as an immense political defeat for the Piñera administration, which pulled out all stops to try to convince the lower house to vote against the bill.

With Interior Minister Gonzalo Blumel and Finance Minister Ignacio Briones addressing the lower house ahead of the vote, the huge weight the government put on the bill was, once again, clear. According to the ministers, the partial withdrawal of pension funds will damage Chile’s economy and could affect the pensions of future generations.

Opposition members and members of the government’s own coalition voted in favor, however, because they consider the government support to date to be insufficient and see the withdrawal as a direct economic relief for affected families.

As ultimately framed, the vote turned out to be a vote in favor or against the entire pension system, the government – and specifically President Piñera – and even the neoliberal system hundreds of thousands Chileans protested against in late 2019. The bill now moves on to the Senate, where various Senators have already declared their support for the bill.

For the Piñera administration, the fact that, despite all attempts to remain united, coalition members voted in favor of the bill illustrates the huge division in the government bloc. A political crisis lies ahead, and its magnitude should become clear in the near future.

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