Pension Fund Withdrawals and finance: new routes for financial extraction

Abstract

In a context of a salary crisis resulting from the effects of the social and health pandemic and due to the lack of economic support, a law was implemented in Chile in July 2020 that allowed the early retirement of 10% of pension funds. This controversial measure allowed more than 11 million workers to access withdrawals and had, in turn, the unexpected effect of reactivating the Chilean economy. This article proposes an analysis of the first withdrawal of pension funds insofar as this measure injected unprecedented economic resources to the working classes who, due to the low amounts of pension savings, could not benefit from the other withdrawals. To this end, my argument is developed in three parts: first, I briefly present the main reforms implemented in Chile during the military dictatorship that allowed the development of a financial infrastructure for the provision of social protection services (AFP); second, I analyze the consumption and indebtedness relations of popular households; and third, I explore the virtues of "efficiency" and "transversality" that, as a result of the withdrawals, are attributed to the financial infrastructure and the new circuits of value capture that this withdrawal built.