Observation (CEACR) - adopted 1992, published 79th ILC session (1992)

Invalidity Insurance (Industry, etc.) Convention, 1933 (No. 37) - Chile (Ratification: 1935)

The Committee takes note of the information supplied by the Government in its report and in particular of the statistical data on the compulsory invalidity insurance scheme.

1. Article 10, paragraph 1, of the Convention. See under Convention No. 35, Article 9, paragraph 1, as follows:

In response to the Committee's previous comments, the Government repeats that Legislative Decree No. 3500 of 1980, which established the Individual Capital Accumulation Pension System, did not envisage any compulsory contribution by employers to the workers' Pension Fund, since that Fund is constituted by the worker himself with the compulsory contribution which his employer deducts from his wages every month, with such contributions as the worker may pay voluntarily into his individual capital accumulation account, and with such voluntary deposits as the worker may make as savings in what is termed a voluntary savings account. However, section 18 of Legislative Decree No. 3500 of 1980, as amended by section 1 of Act No. 18964 of 10 March 1990 provides for a voluntary contribution by employers termed "Agreed Deposits", consisting of such sum or sums which they deposit in agreement with the worker concerned, in the worker's individual capital accumulation account in order to add to the capital needed to finance an early retirement pension or to increase the amount of this pension. The Government adds that these contributions may be agreed upon between the workers and the employer individually or collectively.

The Committee has taken note of the detailed information supplied by the Government. It observes, however, that section 18 of Legislative Decree No. 3500 of 1980, as amended by Act No. 18964 of 1990, cannot be regarded as establishing a contribution by employers to the financial resources of the compulsory insurance scheme within the meaning of Article 9, paragraph 4, of the Convention inasmuch as this merely tends to be a possible supplementary contribution upon which the worker may agree with his employer without there being any legal obligation on the employer to bear its cost. The Committee consequently hopes that the Government will take the necessary measures to give effect to the recommendations of the Committee set up by the Governing Body to examine the representation submitted by the National Trade Union Coordinating Council (CNS) of Chile, under article 24 of the Constitution, alleging non-observance by Chile of, inter alia, Convention No. 35 (see document GB.234/23/28, 234th Session, 17-21 November 1986).

2. Article 10, paragraph 4. See under Convention No. 35, Article 9, paragraph 4, as follows:

In response to the Committee's previous comments concerning the financial contributions of the public authorities, the Government confines itself to repeating that Legislative Decree No. 3500 of 1980 provides for state contribution to the financial resources through the state guarantee, laid down in sections 73 et seq., of minimum old-age, invalidity and survivors' benefits for those insured persons who satisfy the requirements laid down in the Legislative Decree. The Committee cannot but refer again to the conclusions of the Committee set up by the Governing Body, that "although the present legislation provides for the possibility of some financial participation by the State in the form of a guarantee, this participation, given its conditional and thereby exceptional nature, does not strictly correspond to the contribution to the financial resources or benefits of insurance schemes" prescribed by the Convention. The Committee again expresses the hope that the Government will adopt the necessary measures to give full effect to this provision of the Convention.

3. Article 11, paragraphs 1 and 2. See under Convention No. 35, Article 10, paragraphs 1 and 2, as follows:

In response to the Committee's previous comments, the Government states that Legislative Decree No. 3500 of 1980 entrusts the administration of the insurance scheme to the Pension Fund Administrations (AFPs); these are limited liability companies, the authority for whose existence, supervision and control is entrusted to the Pension Fund Administration Supervisory Body, a state body whose chief powers are to authorise the formation or winding up of these companies and to check on the investment of resources and the composition of the investment portfolio. In addition, AFPs may be set up on the initiative of workers or their associations and it may be specified in their statutes that such profit as they make shall be devoted to the grant of other social benefits to worker shareholders and their families.

The Committee takes note of the Government's statement. It points out that the Pension Fund Administrations (AFPs), to which the administration of pensions is entrusted by Legislative Decree No. 3500 of 1980, are limited liability companies and therefore private profit-making institutions; the fact that these institutions are subject to state supervision does not change their character, even though such supervision may diminish the risks inherent in a private institution. In this connection the Committee observes that, according to the statutes of the AFP "Futuro S.A." supplied by the Government, the company, unless the board of shareholders unanimously agrees otherwise, shall annually distribute at least 30 per cent of the liquid profits for the financial year as a cash dividend to its shareholders in proportion to their shares. Furthermore, it is not made clear in those statutes that the AFP "Futuro" S.A. belongs to workers or to workers' associations even though the Government indicates in its report that that is the case. In these circumstances, the Committee cannot but refer again to the recommendations of the Committee set up by the Governing Body that the Government should adopt appropriate measures to amend Legislative Decree No. 3500 to ensure that the insurance scheme is administered by non-profit-making institutions, as prescribed by these provisions of the Convention, except in cases where the administration of the scheme is entrusted to institutions founded on the initiative of the parties concerned or of their organisations and duly approved by the public authorities. The Committee also asks the Government to continue supplying information on the establishment of any new occupational AFPs.

4. Article 11, paragraph 4. See under Convention No. 35, Article 10, paragraph 4, as follows:

In response to the Committee's previous comments, the Government repeats that, in accordance with this provision of the Convention, the workers participate actively in the management of the system. In addition to referring again to the seven Pension Fund Administrations in which the workers have part or total ownership and are represented on the board of directors, the Government supplies information concerning the AFP HABITAT. In this connection it states that in 1989 the board of directors of AFP HABITAT set up a nationwide Members' Participation Committee as one response to anxiety which had arisen among the shareholders; this Committee fits into the general policy pursued in the Chilean Chamber of Construction of maintaining bodies with workers' participation. This Committee, one of the first of its kind in the Chilean social insurance setting, is composed of 11 members including one pensioner and one trade union leader. The Committee holds meetings at which the insured persons are informed of the results obtained, the legal regulations and the general policies of the AFP.

The Committee takes note of this information. It again refers to the conclusions of the Committee set up by the Governing Body that "the participation of insured persons in the management of the AFPs results neither from the current legislation nor from the statutes of these limited liability companies, which make no reference to them or to any occupational organisations ... ". The text of the statutes of the AFP "Futuro" S.A., supplied by the Government, does not appear to invalidate this conclusion.

Consequently the Committee again expresses the hope that the Government will give effect to the recommendations of the Committee set up by the Governing Body, and adopt the necessary measures so that the representatives of the insured may participate in the management of all insurance institutions under conditions to be determined by national laws or regulations, in accordance with the provisions of the Convention.