Chilean Pension Reform for 2025
Chilean pension reform for 2025 mandates a significant bump in employer contributions, which the National Congress approved on January 29, 2025. These changes address long-standing issues such as low pension amounts and gender inequality. The reform is expected to be enacted by the President in March 2025 and will come into effect upon its publication in the Official Gazette.
The new employer contribution is 8.5% of the employee’s taxable income. This percentage is distributed as follows:
- 4.5% to the employee’s individual capitalization
- 1.5% to the protected profitability contribution
- 2.5% to Social Security
Given the impact these changes will have on employers, the increase will be implemented gradually over 9 years, with the possibility of extending it for an additional 2 years if an external evaluation determines a lower-than-expected revenue impact.
Lilienfeld provided this information about Chilean pension reform for 2025. If you need support with your employee benefits in Chile, please contact Asinta, and we will put you in touch with Lilienfeld’s local experts.