LatinNews Daily - 21 January 2021

In brief: Bolivia prepares pension withdrawal plans

* Bolivia’s President Luis Arce has submitted a bill to the legislative assembly which would allow individuals to make withdrawals from pension funds, a measure intended to support those whose livelihoods have been disrupted by the coronavirus (Covid-19) pandemic, but also to help reactivate the economy by boosting domestic consumption. The bill – expected to be approved by the legislature, in which the ruling Movimiento al Socialismo holds a majority – would allow all individuals with up to B$100,000 (US$14,529) in their pension accounts to withdraw up to 15% of this total, and all those aged over 50 with less than B$10,000 in their account to withdraw up to 100%. The government estimates that this measure will inject up to US$1.2bn into the country’s economy, while also providing a safety net for vulnerable individuals, which may be especially necessary if the government heeds calls for new restrictions in the face of a ‘second wave’ of the pandemic. However, critics warn that the impact of depleting the country’s pension funds (said to total around US$20bn, of which only a relatively small portion is held as liquidity) could cause serious problems in future, both for individuals who have drawn on their retirement savings early, and those that are yet to retire, as there will be less funds aviable for pension pay outs.

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