Abstract
Significance However, its key provision -- an increase in the system’s defined contribution -- was rejected by the Lower House. The government will have to negotiate key parts of the bill virtually from scratch in the Senate, where it lacks a majority. Impacts The vote represents a defeat of the government’s attempt to introduce a pay-as-you-go element into Chile’s defined-contribution system. If the bill were to be approved by the Senate, it would probably include a 6% contribution increase, but not a 3%-3% split. Pension reform would have key implications for fiscal sustainability, which will come to the fore in debate in the Senate.
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