La Paz – Bolivia’s leftist government said on Tuesday it had agreed a bill to nationalize the country’s pension system and lower the retirement age to 58.
The ambitious pensions reform bill, which would dismantle the two private retirement funds that have administered the system for years, will immediately be sent to Congress, President Evo Morales said.
The bill was agreed after four years of negotiations with trade union leaders.
In addition to reducing the retirement age in the impoverished country to 58 from 65, mothers and miners would be entitled to pension at an even younger age.
“This is the new policy to redistribute workers’ contributions in the search for lower rates of poverty and equality,” said Morales, a former coca leaf farmer and close ally of Venezuela’s socialist president, Hugo Chavez.
Under the bill, which Morales urged the ruling party-controlled Congress to approve in the coming weeks, a state pensions administrator would start replacing the private funds next year.
There was no immediate comment from the two pensions administrators, Prevision, which is part of Spain’s BBVA (BBVA.P) (BBVA.MC), and Futuro, which is part of Switzerland’s Zurich Financial Services (ZURN.VX).
The two companies manage pension funds on behalf of some 1.3 million Bolivians, according to official figures.
Morales has sought to reverse a wave of privatizations carried out during the 1990s. He has already nationalized a series of utility and public service companies as well as energy and mineral resources.
Morales won easy re-election last year, bolstered by a period of steady economic growth in Bolivia, the region’s biggest exporter of natural gas, and relative political stability.
He said on Tuesday the pensions reform bill would maintain a system of welfare payments of about $340 per year to pensioners who do not have any retirement cover.