Chile's Pinera signs pensions withdrawal into law, economy braces for impact

Chilean President Sebastian Pinera on Friday signed into law a plan to allow citizens to withdraw 10% of their pensions savings as people queued at the administrator's offices in Santiago eager for relief from the economic effects of the coronavirus. The law, approved by two-thirds of legislators on Thursday, was created to give quick cash to millions of Chileans who lost jobs because of the economic shutdown aimed at slowing the spread of the virus.

Chilean President Sebastian Pinera on Friday signed into law a plan to allow citizens to withdraw 10% of their pensions savings as people queued at the administrator's offices in Santiago eager for relief from the economic effects of the coronavirus.

The law, approved by two-thirds of legislators on Thursday, was created to give quick cash to millions of Chileans who lost jobs because of the economic shutdown aimed at slowing the spread of the virus. The Office of the President said Pinera had signed the bill late on Friday but made no comment on its content.

Pinera`s center-right government had opposed the emergency relief measure, saying it would support citizens through the public purse instead. It has also warned about the longer-term impact on the profitability and already low average payouts of pensions. Despite those pleas, queues formed on Friday outside the offices of Pension Fund Administrators (AFP), with opinion polls indicating nearly nine out of every 10 Chilean planned to tap their funds. Most said they would use the money to pay for basic goods and services, but others said they planned to invest the money elsewhere.

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