MercoPress. South Atlantic News Agency

Chile Congress approves pension reforms for all

Chile's social security system, established in 1980

Chile's congress backed a pension reform bill Wednesday to ensure the country's landmark social security program for the first time covers every citizen.

The lower house of congress voted 107-0 to grant nearly 600,000 elderly Chileans who now receive no pension some $125 a month starting in July, and $158 a month beginning in July 2009. The measure will benefit hundreds of thousands of poorer citizens who had not previously paid enough into the system to receive a pension â€" including many women who never held a formal job but worked for years at home, Finance Minister Andres Velasco said. The bill, approved by Chile's Senate in December, must still be signed into law by President Michelle Bachelet, whose spokesman, Francisco Vidal, heralded the measure as her "main campaign promise." In a speech on national radio and television, Bachelet said the legislation has "historic importance for our country, because the state assumes the role of protector of those who need it most." Chile's social security system, established in the 1980's under dictator Augusto Pinochet, was among the first in Latin America. It is based on contributions from public and private sector workers, who see about 12 percent of their salaries deposited into one of five private pension funds in the country, which manage the cash for a commission.