Chile’s retirement income system comprises means-tested social assistance; a mandatory privatelymanaged defined contribution system based on employee contributions with individual accounts managed by a small number of Administradoras de Fondos de Pensiones (AFPs); and a framework for supplementary plans sponsored by employers (the APVC schemes).

The overall index value for the Chilean system could be increased by:

  • raising the level of mandatory contributions to increase the net replacement rate
  • raising the level of household savingsƒ
  • increasing retirement ages for both men and womenƒ
  • continuing to review the minimum pension for the poorest pensioners

The Chilean index value fell from 69.1 in 2015 to 66.4 in 2016 primarily due to a reduction in the net replacement rate.