Proposal to Allow Chileans to Draw Down Pensions Would Hurt Business Climate, Group Says

An association of U.S. businesses in Chile warned on Tuesday that a proposal to allow Chileans to draw money from their pension funds for the fourth time since the coronavirus pandemic began could seriously harm the country's business climate, Reuters reported. Chile's lower chamber of Congress approved the bill late last month, but it faces more resistance in the Senate, where right-leaning lawmakers allied with the administration of President Sebastian Pinera have opposed it. "This new withdrawal of pensions, and particularly of life annuities, ... causes severe damage to Chile's image as an attractive destination for foreign investment," the Chilean-North American Chamber of Commerce said in a statement. Chile's government and central bank have also warned a fourth withdrawal would harm the pension system, hitting the poor the hardest in the long term. Opposition lawmakers, however, say the cash is a lifeline for many Chileans suffering from the economic impacts of the coronavirus pandemic. Before the pandemic, Chileans were largely prohibited from tapping into their pension funds until reaching retirement age. But the economic effects of the pandemic since March 2020 led Congress to approve three withdrawals, each allowing citizens to cash in 10% of their pension fund. This fourth withdrawal would allow for an additional 10%. Read more.