Elimination of programmed withdrawal: what it consists of and what will be its consequences
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María Eugenia Jiménez, executive director of Brain Invest.

One of the modifications of the pension reform that will negatively impact future pensioners is the end of the programmed withdrawal modality, since they will no longer have the freedom to choose the amount of pension to receive at the time of retirement, among the maximum that they finance their savings and a minimum of 3 UF, an option that until now allows those who continue to receive income to avoid increasing their tax base and have a higher pension when they stop being productive.

The pension is added to the complementary global; It is not the same then to receive a pension if other taxable income is generated, than to do so when they have decreased. Being able to continue investing your savings gives you the possibility of having a larger pension amount when you need it most, assuming that the funds have obtained positive returns. But there is more: the impacts on the financial market. The reform establishes that a public entity, in this case the IPS, will pay the pensions, so with the repeal of DL 3,500 that created the AFPs, the rule that regulates the calculation of the programmed withdrawal modality for those who are pensioners must be rewritten. or in the process of doing so when the project has been approved. Thus, with the elimination of the Programmed Withdrawal, it will be achieved that the private entities that manage the savings of those who opt for them and those already retirees in this modality, invest less and less savings, for which we will see effects in the local financial market both for debt and stock. This suggests that consumer loans, mortgages and business financing will become more expensive.

The non-pensioners and future generations will have no choice and their savings will become the property of the Insurance Companies, which will pay them a pension until their death and their existing pension beneficiaries at that time, be it the spouse, civil partner and children. under 24 years of age, as long as they are single and students. Other beneficiaries are the mother or father of a non-married child who proves to live at the expense of the deceased, and in the absence of the above, the mother or father who is the cause of the deceased’s family allowance.

The option of leaving an inheritance will exist, but at the cost of receiving a slightly less pension from the beginning and for life, also for those who are entitled to a survivor’s pension, since the Life Annuity offer sets the amount for life for the pensioner and his survivor beneficiaries.

The sensible thing to do is to preserve both the programmed withdrawal and the life annuity, a formula that has been virtuous, and to maintain something so valued by citizens as the freedom to choose, in this case, who manages their savings and how to receive them.

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