Chile's Pinera announces key pension fund reform after protests

Demonstrators run as a riot police vehicle sprays water during a protest against Chilean President Sebastian Pinera's government in Santiago on January 10

Chile's President Sebastian Pinera has announced plans to reform the country's pensions system, a key measure aimed at easing the South American country's three-month old social crisis.

In an address to the nation late Wednesday, Pinera said he will send a bill to Congress this week that proposes a gradual increase of mandatory contributions from 10 to 16 percent, with employers contributing the increase.

The move "will mainly benefit women, middle class and older adults with severe dependence," Pinera said in the address.

A 2018 proposal to raise pensions by four percent was rejected as insufficient.

The new measures seek to improve the plight of cash-strapped Chilean pensioners who on average receive pensions equivalent to between 30 and 40 percent of their final salary.

The majority of pensioners have to live on around $400 a month in retirement, below the minimum wage.

Pinera's proposal comes almost three months to the day after the eruption in mid-October of widespread, often-violent social protests that left 29 dead and thousands injured.

One of the key demands of protesters was reform of the pensions system, managed by for-profit Pension Fund Administrators.

Pinera said that the reform would increase pensions by around $91 a month for women, and about $73 for male pensioners.

In the midst of the crisis in early December, Congress passed a bill proposed by Pinera to gradually increase minimum pensions by 50 percent.

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