A high-ranking official from the former Concertación assumed: modifying the pension system of the Armed Forces and Public Order in Chile is under discussionat least, since democracy was restored in 1990. But the mere mention of making adjustments or even transferring them to the AFP system creates friction with military institutions.

And recently pension reform presented by the government of Gabriel Boricregarding ABRI pensioners there is no letter.

It Minister of Labor, Jeannette Jarasummed it up this way to DF MAS: “The bill that created the Mixed Pension System aims to increase the pensions of the majority of Chileans, a population that has been in the AFP system for 41 years, a regime that has yet to fulfill a promise made by its creators. This reform does not consider addressing the Armed Forces and Law Enforcement pension systems“

President Boric himself reaffirmed this week. “We have to gradually go there, but I think today someone has to start picking their battles and today we are concerned about increasing pensions for the majority of Chileans and not reducing them”, he assured in a conversation with the Chilean Regional Television channel (TVR). “Why is the Armed Forces not part of the AFP system? (…) They were very clear that it was inconvenient for them to join the AFP,” he added.

Perhaps one of the most advanced in these talks was the second reign of Sebastián Piñera. Through a bill that was submitted in early 2019, and today is in the Chamber of Deputies and Deputies without progress, the military career was expanded to be able to access pensions.

If currently, in the case of officials, 30 years are required to choose an absolute voluntary pension and an access pension, The bill raised it to 35 years of service. Likewise, it is set at 41 years of service, or 44 effective years calculated for retirement -not the current 38 and 41, respectively-, as the maximum duration of a military career. In the case of Permanent Staff and Seafarers, absolute retirement will take place when they turn 40 instead of the current 35.

Those who took part in the conversation with personnel from all levels of ABRI and Public Order said that the negotiations were not easy.

This was revealed from a leak from The Clinic in 2018, when the former Army Commander, Ricardo Martinez -today being sued for fraud within the institution-, said during a special event at the Military School that the government was preparing for a change in military forecasts.

“One must become a strategist. The asset that must be protected is the pension. Retirement is something to be guarded against with teeth and molars; if it is necessary to extend a military career for the essence of our retirement to apply, it must be done”, said the general pragmatically.

In a later interview, in El Mercurio, the uniformed officer explained that by “maintaining a pension” he was trying to emphasize that the military provides service 24 hours a day, seven days a week, without being paid overtime, and that includes transfers. to a different place. Therefore, he assures, “it is important that at the end of their careers they see themselves, in some way, recognized by the State through this pension.”

In addition, knowledgeable sources explain that the Armed Forces distribution system, which only requires them to contribute 6% of their salary, and obtain a pension after 35 years of service. -unlike the civilian system which required a 10% contribution and working until ages 60 and 65- there was an incentive for both men and women to join the ranks of the military and police.

In fact, said the former minister of Piñera, while the Universal Guarantee Pension (PGU) was being processed in the last part of the government, the association of former military officials asked to be included in the benefits, but the reform criteria were the same. The Michelle Bachelet government was used, in which this group was removed from the Pillars of Solidarity.

Pension expense

The latest figures from the Deputy Minister of Social Welfare show that as of December 2020 there were 68,583 retirees from Chile’s Carabineros Welfare Directorate (Dipreca), which brought together personnel from uniformed police and PDI. Of these, 39,136 were given due to seniority, 12,714 were given to widows and widowers, another 12,827 were given to children of employees who died, followed by disabled (2,497) and others to heirs (1,409).

The average pension amount by seniority as of December 2019 is $1,096,167; for disabilities another $1,270,309; widows $704,787 and orphans $309,427. On average with all types of pensions, Dipreca retirees receive $763,853 per month.

On the part of the Armed Forces (Capredena) as of June 2021 there were 105,291 retirees: 70,790 due to retirement (elderly or disabled); 18,375 for widows; 15,514 for orphans and 612 for other posts.

The average monthly pension, in terms of withdrawals, is $1,060,470; $757,943 for widows; $380,739 for orphans and $416,950 for others. On average, Capredena retirees receive $729,381 each month.

The size of the Treasury’s disbursements in paying pensions to retirees and their families is a heavy backpack, assume all that has passed through the Government. Just over 1% of GDP is allocated to this item and represents almost the same amount that the State would spend to finance current pension reform changes, simply by increasing the PGU for private pension system contributors.

According to the 2023 state budget bill, pension, pension and montepíos costs for Capredena and Dipreca totaled $2.5 billion (million million) or US$ 2,740 million per year.

Meanwhile, income from social security contributions that the Treasury will receive from active officers of the Armed Forces and Public Order amounted to $385 billion or US$419 million. The difference for paying pensions is only financed by general taxes.

An old, but still up-to-date study by the 2012 Budget Directorate estimates that for the Armed Forces, fiscal spending devoted to pension payments will increase by an average of 2.6% per year, reaching around US$4,200 million by 2050.

In the case of the National Police, PDI and Gendarmerie pension regimes, the Dipres projection shows that fiscal spending devoted to pension payments will increase by an average of 6% per year, reaching around US$ 7,921 million by 2050.

system in the world

A report by the Library of Congress analyzes what is happening to the world’s armed forces pension systems.

While Canadian law requires a minimum of 25 years of effective service for a soldier to earn a retirement pension, this figure is around 20 years in Peru; and at the age of 15, in countries such as Portugal and Spain.

Regarding the means of supporting the pension pension system, the funds distributed for this purpose are derived, in the Canadian, Australian, Colombian and Peruvian systems, from the income of active members of the military branch, except in the case of Peru , the State must guarantee a portion of the amount.

And the spouse and surviving children are creditors of retirement upon the death of the holder, an element expressly contained in the laws of the UK, Canada, Australia, Spain, Peru, and Colombia.