Observation (CEACR) - adoptée 2012, publiée 102ème session CIT (2013)

Convention (n° 35) sur l'assurance-vieillesse (industrie, etc.), 1933 - Chili (Ratification: 1935)

Follow-up to the recommendations of the Tripartite Committees. Representations made in 1986 and 2000 under article 24 of the ILO Constitution by the National Trade Union Coordinating Council (CNS) and a number of national trade unions of workers of the Private Sector Pension Funds (AFPs)

The Committee recalls that the non-observance by Chile of this Convention and the Invalidity Insurance (Industry, etc.) Convention, 1933 (No. 37), following the reform of the pension system in 1980, has been recognized for many years. This issue has given rise to two representation procedures under article 24 of the ILO Constitution in 1986 and 2000. In both cases, the Governing Body concluded that the Conventions in question were not complied with and called upon the Government to amend the national legislation to ensure that the privately managed pension scheme established by Legislative Decree No. 3.500 of 1980 be administered by non-profit-making organizations; that representatives of the insured are able to participate in the administration of the system; and that employers contribute to the financing of the old-age and invalidity benefits.

In its latest report, the Government does not refer to any amendments made to the private pension scheme which are likely to give effect to the abovementioned recommendations. For the most part, the Government provides information on the repercussions of Act No. 20.255 of 2008 on the Chilean social insurance scheme. The Committee notes that the reform of 2008, apart from the fact that it established a minimum pension scheme subject to a means test funded by the state budget, did not change the basic characteristics of the private pension scheme, in so far as, inter alia, the latter does not guarantee a defined benefit throughout the contingency and excludes the representatives of insured persons from participating in the administration of the pension fund. The social pensions based on the principle of solidarity established under Act No. 20.255 are non contributory old-age and invalidity benefits paid to persons who are not entitled to a pension under other old-age insurance schemes, and who belong to the 60 per cent of the poorest households in the country. In this respect, these benefits cannot be considered as old-age and invalidity benefits in the context of Conventions Nos 35, 36, 37 and 38, as these Conventions provide for defined contributory benefits paid by old-age or invalidity insurance schemes. The Committee draws the Government’s attention to the possibility of carrying out an evaluation – by having recourse if necessary to ILO technical assistance – of the conformity of the solidarity-based pillar created under Act No. 20.255 with the requirements of Part V (Old-age benefit) and IX (Invalidity benefit) of the Social Security (Minimum Standards) Convention, 1952 (No. 102), which make it possible to give effect to these provisions by providing benefits to all residents whose means during the contingency do not exceed prescribed limits.

Communication submitted by the National Association of Public Employees (ANEF), the Association of Employees of the Women’s National Service, the College of Teachers of Chile AG, the National Confederation of Business and Services, and the Confederation of Unions in the Banking and Financial Sectors of Chile. The Committee notes the information sent by ANEF, the Association of Employees of the Women’s National Service, the College of Teachers of Chile AG, the National Confederation of Business and Services and the Confederation of Unions in the Banking and Financial Sectors of Chile, which was received at the Office on 15 September 2011. According to these organizations, the private pension scheme based on a funded pension plan results in discrimination against women in so far as it is based on sex-distinct mortality tables. This means that a man and woman with exactly the same amount in their capital accumulation accounts when they retire will receive different pensions entirely on account of their gender. In its reply, the Government states that the use of sex-distinct mortality tables to calculate men’s and women’s pensions is justified because women have a higher life expectancy. Using unisex tables would undoubtedly increase the pension level of women, but it would result in the available capital in women’s capital accumulation accounts being depleted more quickly. The Presidential Advisory Council for the pension scheme reform carried out studies on the introduction of unisex mortality tables and rejected this possibility for a number of reasons, among which: the risk that the insurance companies’ reserves might be inadequate; a reform of this nature would imply cross-subsidization between men and women: the lack of a comparative basis at international level, since no other country with a funded pension scheme has introduced unisex tables.

The Committee notes that the disparity between the pensions paid to men and women under the private pension scheme is a direct consequence of the nature of the system based on the capital accumulation retirement accounts of the beneficiaries. The Committee notes in this respect that, more than 30 years ago, the Supreme Court of the United States already considered that the Civil Rights Act of 1964 banned a contribution differential on the basis of sex in the context of a pension plan (City of Los Angeles v. Manhart, 435 U.S. 702, 98 S. Ct. 1370 (1978)). The Committee also notes that in 2011 the European Court of Justice ruled that different insurance premiums for women and men constituted sex discrimination and was not compatible with the Charter of Fundamental Rights (Test-Achats Case (C-236/09)). The Committee is also of the understanding that, in a resolution adopted in 2010, the Constitutional Court of Chile ruled that a gender criterion in risk factor tables used in the private insurance health scheme was unconstitutional (section 38 of Act No. 18.933 (Isapres)). In view of the preceding considerations, the Committee invites the Government to avail itself of the technical assistance of the Office so that it might study in greater detail the implications of using unisex mortality tables on women’s pensions and the ways to offset the negative effects caused by this practice.

Communication submitted by the National Confederation of Municipal Employees of Chile (ASEMUCH). In a communication received on 30 May 2011, ASEMUCH considered that the remuneration taken into account to compute the pensions of municipal employees within the meaning of Legislative Decree No. 3.501 had unjustly been restricted to their basic wage, excluding a number of other components of their remuneration in the calculations, and had therefore violated Conventions Nos 35 and 37. According to ASEMUCH, taking into account only the basic wage for calculating the pension results from a misinterpretation of the term “in the portion subject to taxation” contained in section 2 of legislative Decree No. 3.501, which is taken to be synonymous with the term “remunerations subject to taxation”. This interpretation is not consistent with section 5 of the abovementioned Decree, under which social insurance contributions are not paid on the total remuneration, considering that the portion that exceeds 50 times the monthly living wage is exonerated from contributions. ASEMUCH maintains that this restrictive interpretation of remuneration considered for pension purposes has resulted in reducing the level of contributions, the amount of funds constituted for pension purposes and, consequently, has also reduced the level of old-age and invalidity pensions paid to retirees. In its report received by the Office on 21 September 2012, the Government states that the reply to comments from ASEMUCH is still being prepared by the Court of Accounts (Contraloría General de la República), in cooperation with the Under-Secretariat of Social Welfare and the authority responsible for monitoring pensions (Superintendencia de Pensiones), and will be sent as soon as it is available.

The Committee notes that the comments from ASEMUCH concern the damages incurred by the social security system, as a result of the failure to take into account certain components of municipal workers’ pay apart from the basic wage when calculating old-age and invalidity contributions. It notes, in the light of the information submitted by ASEMUCH, that these components of municipal workers’ remuneration which are not subject to old-age and invalidity contributions are taxed in some cases and not in others. Without pre-empting the information that the Government might send in its forthcoming reply, the Committee recalls that, in the context of recent procedures under article 24 of the Constitution (see GB.298/15/6), of which it assumes the follow-up, the ILO Governing Body adopted the conclusions of the Tripartite Committee set up to examine the representation, concluding that the Government was directly responsible for the financial and moral prejudice suffered by the categories of workers concerned. In this particular case, the fact that these components of remuneration were indeed due to the municipal workers is not questioned; they seem moreover to have been collected by the municipal employees, but they were not included in the contribution base as regards old-age and invalidity insurance. On this matter, the Committee would like to recall that under Article 7(3) of the Convention, when contributions are graded according to remuneration, the remuneration taken into account for this purpose shall also be taken into account for the purpose of computing the pension. Furthermore, according to Article 10(5) of the Convention, the public authorities are responsible for the administrative and financial supervision to ensure the proper running of the old-age and invalidity insurance scheme. This responsibility also includes that of ensuring that all the rights and obligations of the parties are respected and that all contributions due which have been or should have been collected, have indeed been collected effectively. The Committee therefore requests the Government to provide detailed explanations on the matter and to indicate whether it has fulfilled the obligation incumbent upon it to guarantee the effective payment of all old-age and invalidity contributions due.