SANTIAGO, June 19 (Reuters) - Chilean president Sebastian Pinera is seeking to reform the Andean country’s private pension funds to boost competitiveness and increase pensions for workers, he told a local radio station on Wednesday.
The conservative Pinera, whose four-year term ends next March, declined to give further details, adding that the proposal would be unveiled soon.
“This seeks to improve the system, (provide) greater competitiveness, lower costs, lower commissions, (give) better returns on investment, but also (seeks to) increase the contribution rate and create more incentives so people who want and can remain in the workforce to do so,” Pinera told radio Cooperativa.
The pension funds, Chile’s biggest institutional investors, have been crucial in developing the country’s local stock market. But many Chileans say they do not receive decent pensions in return for hefty, largely mandatory contributions to the funds.
Pensions, as well as education reform and improved wages, are seen as key electoral issues ahead of the Nov. 17 presidential race for a successor to Pinera, who is barred from running for a second term.
Several left-wing candidates, including frontrunner and former president Michelle Bachelet, have included the creation of a state-run pension in their campaign proposals.
Chile’s private pension fund system was created by Pinera’s brother Jose, a former minister under ex-dictator Augusto Pinochet’s regime.
Under the system, six private pension groups administer five different funds that invest in fixed income and stocks.
The system, which was worth around $164.96 billion dollars in May, has attracted investor attention due to high returns and robust local economic growth.