(Adds background on Argentina's nationalization of its private
pension system, in the sixth paragraph.)
DOW JONES NEWSWIRES
Bolivian President Evo Morales has sent a bill to Congress to
nationalize the nation's pension-fund system, increase benefits and
lower the minimum retirement age.
Morales is urging the legislature--controlled by Morales's
ruling Movement for Socialism, or MAS, party--to pass the bill
before the end of the year. Rapid approval will be like a
"Christmas present," Morales said Tuesday, according to state news
agency ABI.
Bolivia privatized administration of its national retirement
system in 1996, but the government has greatly expanded state
control over its natural resources and services since Morales's
2006 election and landslide re-election in December. He has
nationalized or raised taxes on oil, natural gas, mining,
telecommunications, and power companies.
Spain's Banco Bilbao Vizcaya Argentina SA (BBVA) and
Switzerland's Zurich Financial Services AG (ZFSVY, ZURN.VX)
currently administer Bolivia's pensions, although the government
took over actual managing of the funds some time ago. A spokesman
for BBVA declined to comment, but Spanish newspaper El Mundo
reported that the company was preparing to leave Bolivia and that
the impact would be minimal, as its profits in Bolivia total just 2
million euros ($2.7 million).
Zurich Financial Services spokesman Angel Serna said: "We are
closely monitoring developments and assessing the situation," but
declined to comment further.
Bolivia's nationalization of the private pension-fund system
follows a similar move by neighboring Argentina last year. In late
2008, Argentina's congress approved President Cristina Fernandez's
plan to take over the roughly $30 billion in retirement funds
managed by companies created 14 years earlier in a pension
privatization scheme. Critics accused the Argentine government of
putting the country's nest egg at risk after much of the funds were
lent to the federal government to support heavy spending.
Bolivia's new bill, which is expected to greatly expand
benefits, comes after extended negotiations with labor unions. The
minimum retirement age will be lowered to 58 from 65, with an even
lower retirement age for women with children and those working in
dangerous industries such as mining.
Pensioners who have worked for 30 years and have a salary of
3,000 bolivianos ($425) per month upon retirement will see their
benefits under the new law rise to 2,050 bolivianos from the
current 860 bolivianos, Morales said.
-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738;
shane.romig@dowjones.com
--Christopher Bjork in Madrid and John Revill in Zurich
contributed to this article.