ILO-en-strap
NORMLEX
Information System on International Labour Standards
NORMLEX Home > Country profiles >  > Comments

Observation (CEACR) - adopted 2015, published 105th ILC session (2016)

Chile

Old-Age Insurance (Industry, etc.) Convention, 1933 (No. 35) (Ratification: 1935)
Invalidity Insurance (Industry, etc.) Convention, 1933 (No. 37) (Ratification: 1935)

Other comments on C037

Observation
  1. 2016
  2. 2015
  3. 2012
  4. 2010
  5. 2007
  6. 2000
  7. 1999
  8. 1998
  9. 1997
  10. 1995
  11. 1993
  12. 1992
  13. 1990
Direct Request
  1. 1992
  2. 1990

Display in: French - SpanishView all

Follow-up to the recommendations of the tripartite committee representations made under article 24 of the ILO Constitution by the College of Teachers of Chile AG

The Committee takes due note of the adoption by the Governing Body at its 323rd Session (March 2015) of the recommendations of the tripartite Committee set up to examine the representation made under article 24 of the ILO Constitution by the College of Teachers of Chile AG in 2009, alleging non-observance of the Old-Age Insurance (Industry, etc.) Convention, 1933 (No. 35), and the Invalidity Insurance (Industry, etc.) Convention, 1933 (No. 37).
It notes, in particular, that the Governing Body noted the will of the Ministry of Education to improve the teachers’ wage and welfare conditions through social dialogue and to find a durable solution to the pension issues raised in the representation by establishing, together with the College of Teachers of Chile AG, a technical board, which is expected to submit concrete proposals to that end and to deliver its final report at the end of the first semester of 2015. The Governing Body also encouraged all parties concerned to reach a viable agreement in the very near future and requested the Office to provide the parties to the representation with any technical, consultative or conciliatory services and good offices, which they may request. The Governing Body ultimately requested the Government to send reports under article 22 of the ILO Constitution on the application of Conventions Nos 35 and 37 by 1 September 2015 containing detailed information on the measures taken to give effect to the conclusions and recommendations made by the tripartite Committee, as well as on the solutions advanced through social dialogue within the work of the joint technical board established by the Ministry of Education and the College of Teachers of Chile AG. These reports will be examined by the Committee of Experts on the Application of Conventions and Recommendations in relation to the follow-up on the recommendations adopted by the Governing Body in 1999 and 2006 on the previous representations submitted by the College of Teachers of Chile AG on similar issues.
Noting, however, that the Government’s report has not been received, the Committee urges the Government to provide, for examination at its next session, all the information requested with respect to how the Government has followed up on the recommendations of the tripartite Committee which were formulated as follows:
  • – take the measures necessary for acquiring and preserving pension rights of the municipal teachers in conditions of legal certainty, uniform implementation and enforcement required for the proper functioning of the pension scheme based on capital accumulation accounts, in particular:
(i) to accept the responsibility, in compliance with Article 10(5) of the Convention and Article 11(5) of Convention No. 37, for the administrative and financial supervision of the collection and payment of pension insurance contributions by the municipalities and municipal bodies employing the teachers, establish effective mechanisms for recuperation of arrears of unpaid contributions and, where necessary for this purpose, provide appropriate contributions by the public authorities to the financial resources of the municipalities or to the pension benefits of the teachers, in compliance with Article 9(4) of Convention No. 35 and Article 10(4) of Convention No. 37;
(ii) to ensure participation of the representatives of the teachers and other categories of insured persons in the management of their pension schemes, including collection of insurance contributions and supervision of their effective payment into respective schemes by the municipalities and other employers in respect of their employees, in compliance with Article 10(4) of Convention No. 35 and Article 11(4) of Convention No. 37, and to engage the process of dialogue with the representatives of the teachers for this purpose;
(iii) to improve the effectiveness of dispute resolution and appeal mechanisms in pension matters concerning municipal employees, ensure prompt rendition of justice in these cases and execution of court decisions engaging the liability of the municipalities for unpaid contributions, in line with Article 11 of Convention No. 35 and Article 12 of Convention No. 37.
Observation submitted by the National Confederation of Municipal Employees of Chile (ASEMUCH). In a communication received on 30 May 2011, ASEMUCH considers that the remuneration taken into account to compute the pensions of municipal employees within the meaning of Legislative Decree No. 3.501 is unjustly restricted to their basic wage, excluding a number of other components of their remuneration in the calculations, and therefore violates 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 latest report received in September 2012, the Government stated 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 report which should have been submitted by the Government by 1 September 2015 would also have contained information in respect of the allegations raised by ASEMUCH. It also notes that ASEMUCH submitted additional information on 1 September 2015 on developments relating to the allegations. The Committee therefore requests the Government to supply a comprehensive reply to the allegations made by ASEMUCH in its next report taking into account the above conclusions and recommendations adopted by the tripartite Committee set up to examine the above representation.
Noting that the Government’s report has not been received, the Committee repeats its previous pending comments regarding the below issues:
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.
[The Government is asked to reply in detail to the present comment in 2016.]
© Copyright and permissions 1996-2024 International Labour Organization (ILO) | Privacy policy | Disclaimer