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  • Protesters hold signs that read "Our grandparents, our future" in Santiago, Chile.

    Protesters hold signs that read "Our grandparents, our future" in Santiago, Chile. | Photo: EFE

Published 1 July 2016

Retired citizens will see a 2 percent decrease in payouts, despite the fund being worth 60 percent of the country’s GDP.

Chilean pensioners marched to La Moneda Palace Thursday in the capital city Santiago to demand an end to the private pension funds system that will decrease the amount payed to retirees.

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About 400 people protested against the Chilean pension system that was created in 1980 during the dictatorship of Augusto Pinochet.

"In Chile, the elderly live in miserable conditions, with children taking care of their parents, the product of a perverse system that enriches managers and impoverishes contributors who are forced to postpone their retirement," said the Committee for Public Provision, organizers of the protest.

Senior citizens and their families protested in the streets of Santiago and reiterated a call to Chilean lawmakers to defend workers’ rights.

The pension fund systems are private institutions that manage the future salary of retired citizens through a monthly deduction from workers' salaries.

"There is great uncertainty about the Chilean pension system,” said lawmaker Marcos Espinosa. “And it’s good for us to give assurances regarding the payment of retirement funds and face the post-work life in decent conditions."

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With increasing life expectancy, the pension fund system changed mortality rates starting from July 1. Workers who retire from that date will receive close to 2.1 percent less money for their retirement.

Starting July, about 10,000 people will become new pensioners, of which 52 percent are women and 48 percent men.

According to Fundacion Sol, one of the most important centers of economic and social studies in Chile, 94 percent of retired women and 87 percent of retired men receive a monthly pension of US$231. The minimum salary in Chile is US$370.

Chilean President Michelle Bachelet said in May that she would speed up the creation of a state-run pension fund system.

"It will bring more competition, lower administration costs and improve coverage," said Bachelet.

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