Chilean Pension Funds: An Evolving System after a Third of a Century

Pension funds are a par excellence passionate topic, and this regardless of the country. Chile is not an exception. Representing a real paradigm, the Chilean experience, regarding the way financing of pensions has been reformed, is singular because this country has been a pioneer in this area by substituting, in a radical way, a defined contributions mandatory individual pension funds system to its old pay-as-you-go system. Built on three sections, this article highlights first the virtues of long-term savings, related to the existence of pension funds, generating positive externalities, that has contributed, among other things, to the funding and the modernization of the Chilean economy. Then he describes and analyses the specific modalities and features of the Chilean pension funds and their performances. Finally, it presents and analyzes the main projects of reforms currently in debate in the country, which aim correcting shortcomings in the present-day system of pension funding.