Chile moves to replace multifunds with generational pension funds

Chile's pension reform, enacted under Law No. 21.735, will replace the existing multifund system with automatically age‑adjusted Generational Funds. The new regime is set to begin in April 2027 and will migrate the savings of millions of workers to a structure that shifts investments from growth‑oriented assets to more conservative ones as individuals approach retirement. A public consultation on the investment regime runs until 31 July, with the final proposal expected in September. Superintendency of Pensions head Joaquín Cortez stressed the importance of a cautious transition, noting that the shift must accommodate changing economic conditions, such as the post‑pandemic inflationary episode that reduced the protective value of traditional diversification. The reform also includes other measures, including the activation of the Fondo Autónomo de Protección Previsional (FAPP), an increase in the Universal Guaranteed Pension for those over 75, and limits on indirect commission fees.