Chilean Pension Reform Set to Deliver Benefits to Nearly 3 Million Retirees
Santiago, Chile – A sweeping pension reform in Chile is poised to deliver tangible โขbenefits to approximately 2.8 million retirees beginning in Marchโ 2025, marking a significant shift โขin the country’s social security system. The reforms, decades in the making, aim to bolster pensions, address gender inequities, and re-establish employer contributions to the pension system.
The โchanges represent aโฃ fundamental restructuring of Chile’s pension framework, designed to โimprove theโข financial security of current โฃand future retirees. Key provisions โขinclude the elimination of collection costs, โthe implementation of pension gap insurance, andโค the โคreintroductionโ of employer contributions – paused forโ 43 years – starting with a 1% contribution โfrom August 2025, progressively increasing to 7% plus โขdisability and survival insurance by 2033. These contributions will be employer-financed and will not affect workers’ net salaries.
A significant portion of the new contributions will be directed towards โSocial Security, โspecifically to enhanceโ pensions โfor existing retirees, with a portion alsoโ allocated to individual accounts. concurrently, the Global Guaranteed pension (PGU) willโ increase from $224,000 to $250,000 Chilean pesos, beginning September 1, 2025.
The PGU increaseโค will be rolled out โin phases,โ prioritizing those 82 years and older. Individuals aged โ82 or above as of September 30, 2025, will receive the increase automatically that month.โ Those turning 82 between October 2025 and August 2026 will see theโ increase in theโ month of their birthday.By September 2026, the benefit will extend to those โฃ75 โคand โolder, and by 2027, all pensioners โข65 and older will โbe eligible.
Further pensionโฃ increases, ranging from 14% to 35%, are scheduled to โฃtake effect in January 2026. These adjustments areโ attributed to the implementation of benefits โfor “quoted years” – recognizing โขa lifetime of contributions – and compensation for life expectancy, designed to address genderโฃ disparities โขwithin the system, acknowledgingโ women’s longer average lifespans.