MetLife buys Chilean pension fund: the meaning of neoliberalism
Chile: Laboratory for Neoliberalism:
Between 1973 and 1989, a government team of economists trained at the University of Chicago dismantled or decentralized the Chilean state as far as was humanly possible. Their program included privatizing welfare and social programs, deregulating the market, liberalizing trade, rolling back trade unions, and rewriting its constitution and laws. And they did all this in the absence of the far-right's most hated institution: democracy.
The results were exactly what liberals predicted....The majority of workers actually earned less in 1989 than in 1973 (after adjusting for inflation), while the incomes of the rich skyrocketed...
One of the most trumpeted "successes" of Chile's economic miracle is the privatization of its public social security system. It's most vocal supporter is Chilean economist José Piñera, who was once Pinochet's Minister of Labor...Piñera is co-chairman of a $2 million war being waged against U.S. Social Security by the Cato Institute...
http://www.huppi.com/kangaroo/L-chichile.htm
MetLife pays $2 billion for Chile pension manager
MetLife, the largest U.S. life insurer, agreed to buy Chilean pension manager AFP Provida from Banco Bilbao Vizcaya Argentaria in a deal valued at about $2 billion to add fee income in Latin America... BBVA has agreed to transfer its 64.3% stake to MetLife, according to the statement...With the acquisition of Provida, MetLife’s operating earnings from emerging markets are expected to grow to about 17% from 14% currently...
BBVA has sought buyers for its pension fund assets in Chile, Mexico, Peru and Colombia this year...
MetLife follows Principal Financial Group in reaching a deal to acquire a manager of Chilean retirement funds. Principal Financial agreed in October to buy AFP Cuprum for about $1.5 billion, boosting fees from managing assets.
http://www.pionline.com/article/20130201/DAILYREG/130209995
2005: Chile's Retirees Find Shortfall in Private Plan
Under the Chilean program - which President Bush has cited as a model for his plans to overhaul Social Security - the promise was that such investments...would deliver monthly pension benefits larger than what the traditional system could offer.
But now that the first generation of workers to depend on the new system is beginning to retire, Chileans are finding that it is falling far short of what was originally advertised under the authoritarian government of Gen. Augusto Pinochet.
The government continues to direct billions of dollars to a safety net for those whose contributions were not large enough to ensure even a minimum pension approaching $140 a month. Many others...remain outside the system altogether.
Combined, those groups constitute roughly half the Chilean labor force.
Even many middle-class workers...are finding that their private accounts - burdened with
hidden fees that may have soaked up as much as a third of their original investment - are failing to deliver as much in benefits as they would have received if they had stayed in the old system.
Dagoberto Sáez...is a 66-year-old laboratory technician here who plans...to retire in March. He earns just under $950 a month;
his pension fund has told him that his nearly 24 years of contributions will finance a 20-year annuity paying only $315 a month.
"Colleagues and friends with the same pay grade who stayed in the old system, people who work right alongside me," he said, "are retiring with pensions of almost $700 a month - good until they die.
I have a salary that allows me to live with dignity, and all of a sudden I am going to be plunged into poverty, all because I made the mistake of believing the promises they made to us back in 1981."
http://www.nytimes.com/2005/01/27/business/worldbusiness/27pension.html
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