1GzuFGC

But even where individual capital account systemshave already been introduced, much can be doneto redress women’s socio-economic disadvantage.Chile’s 2008 pension reform, led by PresidentMichelle Bachelet, introduced a number ofgender-sensitive measures and reversed someof the negative impacts of earlier policies (seeBox 3.5). Bachelet’s leadership and commitmentto advancing gender equality were crucial to thesuccess of the reform process. 108BOX 3.5Redressing women’s socio-economic disadvantage in Chile’s 2008 pension reformIn the early 1980s, Chile carried out a major pension reform that introduced privately administeredindividual capital accounts and gradually phased out publicly managed social security schemes. Thisshift had a particularly adverse impact on women’s pension entitlements. 109 Minimum pensions for thosewith limited individual savings required long contributory records (20 years), reducing women’s access tothese benefits, while non-contributory pensions were low and tightly targeted. By the mid-2000s, only 55per cent of women over 65 years of age were in receipt of an old-age pension compared to 71 per centof men. Gender gaps in the level of benefits derived from the individual capital account system were alsolarge (see Figure 3.6).When Michelle Bachelet stood as a Presidential candidate in 2006, she promised to undertake aprofound review of the pension system. Once elected, she used her presidential powers to ensure thatwomen’s access to pension benefits was central to the reform project, mandating the pension reformcommission to eliminate gender discrimination from the pension system. Although this ambitious objectivewas not fully achieved, the 2008 reform did significantly enhance women’s income security in old age by:• Extending the reach of non-contributory pensions to 60 per cent of the lowest-income households. In2013, more than 70 per cent of all non-contributory benefits went to women. 110• Recognizing employment interruptions due to childrearing through care credits for mothers, whichhave been estimated to increase women’s average pensions by as much as 20 per cent. 111• Creating provision for pension splitting on divorce, whereby the main (usually male) spouse’s pensionfunds accumulated during marriage are split upon separation if the divorce judge considers that oneof the two parties faces economic disadvantage.These advances notwithstanding, the scope of gender-sensitive pension reforms has been limitedby the country’s privatized pension system. Indeed, the administration was reluctant to overhaul theindividual capital account system, fearing turmoil in the financial markets and facing opposition frompowerful business interests including private pension fund administrators. 112 While the expansion of noncontributorybenefits provided a less-contested reform path, this choice left unaddressed one of the mostdiscriminatory features of the Chilean pension system: gender-specific actuarial tables. It remains to beseen whether the commission recently established to look at further reforms of the pension system willaddress this issue during Bachelet’s second term (2014–2018).