Fiancial Fees Decimate Chile's Private Pension System

Back when George Bush was trying to privatize Social Security, Chile got a lot of press for its “successful” private pension plan. The plan was implemented in 1981 and only now are a significant number of Chileans reaching the point when they have to start relying on that pension as they retire. And the results are shockingly bad. The plan only has a net return of a paltry 3% after 35 years. But the reason for this exceedingly poor performance is hardly unexpected – inordinately high fees to the pension managers is the primary reason. The actual investment returns were around 8% but management fees diluted that to the pitiful 3%. The larcenous fees were essentially legalized theft from the citizens of Chile. Once again, a government allows financial services to fleece an unsuspecting public out of billions that they worked hard for and were required to by law to turn over to be managed.