Chile: Major Pension Reform that will Impact Employers’ Contributions

On 29 January 2025, Congress approved a major pension reform.  Although it hasn’t been published as law, it is probable that will happen this March.

Among the most relevant aspects of this reform are:

1. A new Social Provisional Insurance will be created to finance benefits with contributory elements, considering gender gaps.
2. This insurance will be funded by employer contributions to a new entity called Autonomous Pension Protection Fund, which will have to be created.
3. Under this new statute, pension contribution structure increases since the employer will pay an additional 8.5% of the employees’ salary (partly destined to the employees’ individual pension accounts and the rest to this new fund).
4. Employer’s contribution will increase gradually (projected to be fully enforced by mid-2033).
5. If the reform is set to be law in March, the first increase will start by August 2025, and then, gradually once a year.