Following a new wave of protests against Chile’s Pinochet-era privatised pensions system, María Carrasco of libertarian communist journal Solidaridad looks at why women have particular reason to stand up for a new way.
Major rallies have been ongoing since last year against the six private for-profit funds which currently hold Chile’s £122 billion in assets but pay just £320 a month to poorer pensioners.
When we speak of the pension system in Chile we imagine that its principles should be analogous to that of social security, based on universality, solidarity, efficiency and comprehensiveness. But we know that the system meets neither international standards nor the needs of individuals, and as a structural feature, it is extremely discriminatory to women.
To give some context, 2016 was marked by agitation and mobilisations which expressed widespread dissatisfaction with the structural deficiencies of the current pensions system in Chile. In it, the individual savings of each worker are managed by private financial institutions, which from the period of the dictatorship assumed management of these funds.
In an attempt to patch the pension system in 2008, Reform Law 20,255 (See UNRISD report page 24) was applied. This requires gradual mandatory coverage for self-employed people since 2012; includes a non-contributory universal basic pension and two solidarity pensions to replace the former Program of Pensions Assistance, a welfare pension is guaranteed to people with no income or do not exceed 50% of the new minimum pension, and a universal solidarity pension for all over-65s. These reforms did make improvements, but do not address systemic discriminatory deficiencies which particularly harm women, perpetuating gender inequality.
Discrimination against women through pensions
Women are victims of direct discrimination in the labour market, they receive less pay for exactly the same work done and their functions are regulated by a legal framework that limits the period of contribution, considering longer periods of retirement. They are also likely to pay in less on average throughout their working life, limiting their accumulation period and extending their funding period on the basis of their own savings (ECLAC, 2004).
Sexual difference as a factor shaping access to employment is a determining factor in pensions inequality. Women receive lower pensions than men because of their absences from the labour market to raise children, increasing the number of contribution years required to obtain the minimum pension, or with fewer contributions than men a pension calculation based on what they have accumulated their individual account. Taking into account mortality tables which are also differentiated by sex background, women are poorly capitalised but have a higher life expectancy (Mesa, 2013).
As a result women self-financed pension take averages $93,077, while men get $204,332, meaning women get just 56% of the pension that men get. 59% of women receive early pensions under the poverty line, while 26% of men are in the same situation.
As we know, the pension system is unfair to all workers, but does not affect everyone the same way. The way our society organises work creates worse conditions for women who are relegated to unpaid work, suffering particularly hard in their old age. Recognising this difference is essential to work on any improvement. And it is both something that allows us to reveal deeper problems as well, much as all roads lead to Rome, all daily samples of gender inequality allow us to deepen our understanding of the ravages of patriarchy in our lives and allows us to fight it from all spaces.