Observation (CEACR) - adopted 2000, published 89th ILC session (2001)

Old-Age Insurance (Industry, etc.) Convention, 1933 (No. 35) - Chile (Ratification: 1935)

1.  The Committee notes the conclusions and recommendations of the committee set up to examine the representation made by a number of Chilean unions of employees of pension fund administrators (AFPs), under article 24 of the Constitution, alleging non-observance by Chile inter alia of Convention No. 35 (document GB.277/17/5, 277th Session, March 2000). Bearing in mind the conclusions contained in paragraphs 18-25 of the report and in the observations made by the Committee of Experts, the above committee recommended the adoption of measures to ensure that:

(i)  the pension system established in 1980 by Legislative Decree No. 3500 is administered by non-profit-making institutions in accordance with the provisions of Conventions Nos. 35 and 36 (paragraph 1 of Article 10) and Conventions Nos. 37 and 38 (paragraph 1 of Article 11), unless the administration is entrusted to institutions founded on the initiative of the parties concerned or of their organizations and duly approved by the public authorities, in accordance with Conventions Nos. 35 and 36 (paragraph 2 of Article 10) and Conventions Nos. 37 and 38 (paragraph 2 of Article 11);

(ii)  representatives of the insured persons participate in the administration of the system under conditions determined by national laws and regulations, in conformity with the provisions of Conventions Nos. 35 and 36 (paragraph 4 of Article 10) and Conventions Nos. 37 and 38 (paragraph 4 of Article 11);

(iii)  the competent services carry out and strengthen their oversight of employers and impose effective sanctions to discourage recurrences of failure to pay pension contributions.

2.  The Committee observes that, in its recommendations, the committee set up to examine the representation of November 1998 confirms the observation that this Committee has been making for several years concerning Article 10, paragraphs 1, 2 (administration of the insurance) and 4 (participation of the insured persons in the management of the insurance institution), of the Convention. The Committee therefore hopes that the Government will take the necessary measures to implement the decisions of the Governing Body.

3.  With regard to the other points raised in its previous comments, the Committee notes the information supplied by the Government in its report for the period 1998-99, which it decided to postpone examining pending the Governing Body’s decisions concerning the abovementioned representation of November 1998. The Committee notes that the Government provides no information on the matters of principle raised in its previous comments. That being so, the Committee hopes that the Government will take the necessary steps to provide, in accordance with Article 9, paragraph 1, of the Convention, that employers shall contribute to the resources of the insurance scheme and, in accordance with Article 9, paragraph 4, that the public authorities shall contribute to the resources or to the benefits of the insurance scheme.

4.  With regard to the decision adopted by the Governing Body of the ILO at its 265th Session (March 1996) to invite States parties to Conventions Nos. 35, 36, 37, 38, 39 and 40 to consider the possibility of ratifying the Invalidity, Old-Age and Survivors’ Benefits Convention, 1967 (No. 128), and accordingly denouncing Conventions Nos. 35 to 40, the Committee notes that the Government fully agrees to and accepts the decision of the Governing Body concerning the denunciation of Conventions Nos. 35, 36, 37 and 38. So far, it has been unable to submit the denunciation of these instruments to the Tripartite Committee on Convention No. 144, but the Government hopes to be able to do so as soon as possible.

With regard to the possibility of ratifying the Invalidity, Old-Age and Survivors’ Benefits Convention, 1967 (No. 128), Article 44 of which provides that acceptance of the Convention ipso jure involves the denunciation of Conventions Nos. 35, 36, 37 and 38, the Committee notes that Convention No. 128 has been submitted for consideration and analysis to the technical bodies for them to determine the feasibility of its implementation in the light of existing legislation, particularly the new system of pension administration and funding, and the differences between it and Conventions Nos. 35, 36, 37 and 38. No decision has been taken because it would appear that, as regards the administration and funding of pensions, Convention No. 128 does not differ from Conventions Nos. 35, 36, 37, 38, 39 and 40, which are to be denounced. The Committee asks the Government to inform it of any decisions taken on this matter.

5.  The Committee notes the information submitted by the Directorate of the National Association of Academics of the University of Chile (AG); the Directorate of Act 19.170; Beneficiaries of the State Railway Company; the Chairman of the National Association of Employees of the Directorate of Libraries, Archives and Museums (DIBAN); the Association of Professional and Technical Staff of the University of Chile (APROTEC); the Association of Public Health Employees, Western Region; the Directorate of the Federation of Associations of Employees of the University of Chile (FENAFUCH); and the Association of Public Employees for Redress for Pension-related Injury.

In their observations the abovementioned organizations allege that, upon retiring, public employees who joined the individual capitalization pension system established by the Legislative Decree of 13 November 1980 have seen the amount of their pensions drop to one-third of their real income or, at best, to under one‑half. This has given rise to a situation of inequality, since two workers of the same age with the same number of years’ service and the same monthly pension or income may be treated differently on retirement, one receiving a pension amounting to one-third of that of the other, merely because they belong to different pension schemes. According to the above organizations, as a result some of the pensions already paid by the AFPs are lower than the minimum monthly wage. The Committee notes these observations. It recalls that, according to Article 19 of the Convention, the rate of the pension shall be an amount which, together with any means of the claimant in excess of the means exempted, is at least sufficient to cover the essential needs of the pensioner. The Committee hopes that the Government will provide relevant information on this matter.

6.  Lastly, the Committee hopes that the Government will provide the information requested in its observation of 1999.