Chile's president moves to block further savings withdrawal

Chile’s president will appeal to the country’s Constitutional Court to overturn plans to allow participants to withdraw another 10% of their retirement savings.

Permitting a second withdrawal from retirement plans, known as AFP funds, was unconstitutional, President Sebastian Pinera, said in a statement Sunday. The plan for a second withdrawal represent serious damage to the present and future retirement plans of all Chileans, while also benefiting high-income earners by providing tax-exempt drawdowns, the statement said.

Chile’s Constitution Committee of its Chamber of Deputies — the lower house of the country’s National Congress — approved the second 10% withdrawal in early November.

Mr. Pinera in July enacted a reform to allow participants to withdraw 10% of retirement savings to help cope with the effects of the coronavirus pandemic.

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