As Nevada’s two major party Senate candidates continue to parry and thrust over the issues — with Social Security as one of those — we might hear more about this weekend’s protests in Chile, where, in 1981, the nation privatized its pension program.
According to The Wall Street Journal, thousands took to the streets demanding a dismantling of that private pension system because its payouts are too low.
Catherine Cortez Masto has been accusing Joe Heck of advocating privatization of Social Security, though he actually has merely suggested allowing younger workers to privately invest a portion of their Social Security contributions.
According to WSJ, Chileans on average retire on less than 38 percent of their pre-retirement income, compared to almost 45 percent of pre-retirement income for Americans on Social Security.
Workers in Chile contributed 10 percent of their wages to an investment account. U.S. workers and their employers each kick in 6.2 percent of wages up to $118,500 a year.
The plan in Chile is to start requiring employers to pony up 5 percent of wages, but that doesn’t help current retirees, 80 percent of them living on less than minimum wage and 44 percent below the poverty line.
But you have to read to the final paragraphs of the report to learn the reason for this apparent disparity.
The problem is that too many Chileans fail to consistently contribute to the system.
Those who contributed for at least 30 years received an average pension amounting to 77 percent of pre-retirement income.