Chile · PENSIONS
Key Facts
- —The rule Chile’s pension regulator issued the new investment regime on 1 September 2026.
- —When it bites The regime and the new funds both start on 1 April 2027.
- —The change Ten age-based generational funds replace the five lettered multifondos.
- —Savers You are assigned a fund by year of birth, and it de-risks as you age.
- —Managers Each AFP sets its own allocation within regulator ranges, locked for two years.
- —Alternatives The cap on alternative assets in the youngest fund rises from 20% to 25%.
The lettered funds are going. From April 2027 your birth year picks your fund, and the fund gets safer as you get older.
Chile has rewritten how its pension savings are invested. The Superintendencia de Pensiones issued the final investment regime on 1 September 2026.
It replaces the five lettered funds with ten funds organised by age. Nothing changes for savers until 1 April 2027.
What Replaces the Multifondos
Since 2002 Chilean savers have chosen among five funds labelled A to E, from riskiest to safest. Choosing well required knowing something about investing.
The new system has ten generational funds and assigns you to one by your year of birth. The fund itself shifts from riskier to safer assets as its cohort ages.
One fund covers everyone up to 35, eight cover five-year bands, and one covers those over 75. Mandatory savings stay in the assigned fund until you retire.
Voluntary savings are different. Those you can put in whichever generational fund you like.
The Dates That Matter
The regime was issued on 1 September 2026, which was the legal deadline. It does not take effect that day.
Managers must file their initial strategic allocations with the regulator by 1 March 2027. The regime and the new funds both start on 1 April 2027.
Until then the lettered funds continue as they are. Transfers between the old and new funds will happen off formal secondary markets, to avoid moving prices.
Where This Came From
The generational funds were created by Chile’s pension reform law, published on 26 March 2025. The same law raised employer contributions to 8.5% of pay, phased in.
Of that, six percentage points eventually reach individual accounts and 2.5 points fund a new social insurance pool. The law also raised the universal state pension.
It set a floor of ten generational funds. The regulator has gone with exactly ten.
What Changes for the Managers
Each AFP will now set its own strategic allocation by asset type, within ranges the regulator fixes. An allocation once set cannot be changed for two years.
Performance is measured monthly over a rolling 36 months against that manager’s own reference portfolio. Beat the upper band and the manager earns extra; fall below the lower band and it pays in from its own money.
The bands run from 240 to 290 basis points a year. That is roughly three times wider than the draft the regulator consulted on.
Industry had criticised the draft for forcing everyone into passive strategies.
What Was Repealed
It is easy to describe this as replacing a central benchmark. There was never one.
What went is the minimum return rule, which measured each fund against the industry average for the same fund type. The reform repealed both that rule and the buffer reserve attached to it.
The capital managers must set aside also changed. It moves from 1% of each fund to 30% of the commissions the manager charged over the previous twelve months.
More Room in Private Assets
The regulator raised the ceiling for alternative assets in the first three stages of the generational funds. In the youngest fund the total alternatives limit goes from 20% to 25%.
Alternatives then taper with age, down to 5% in the oldest funds. Private capital specifically is capped at 20% in the youngest three stages.
The regulator also authorised a private capital allocation in the final stages, where none had been permitted. That is set at 3%.
It removed the lower bound on alternatives ranges as well, an explicit industry request. Growth assets are capped at 95% in the youngest fund and 31.8% in the oldest.
The System This Applies To
Chilean pension funds held about 227.6 trillion pesos at the end of July 2026, roughly US$246 billion. Some 44.3% is invested at home and 55.7% abroad.
Seven managers run it. Habitat is the largest, followed by Provida, Capital, Cuprum, Modelo, PlanVital and Uno.
The Reaction So Far
The regime is a day old and no manager has commented publicly on the final text. Everything on the record refers to the July draft.
The industry association welcomed the freedom to set allocations while warning about regulatory rigidities. Cuprum’s chief executive Martín Mujica had said the narrow bands pushed managers toward passive strategies.
The regulator widened those bands in the final version. That much of the criticism landed.
Frequently Asked Questions
When does this actually start?
On 1 April 2027. The regime was issued on 1 September 2026, and managers must file their initial allocations by 1 March 2027.
What replaces the A to E funds?
Ten generational funds. One covers savers up to 35, eight cover five-year age bands, and one covers those over 75.
Do I still choose my fund?
Not for your mandatory savings, which are assigned by year of birth. Voluntary savings can go into any generational fund you pick.
What is an AFP?
An Administradora de Fondos de Pensiones, one of the private companies that manage Chile’s compulsory pension savings. There are seven.
What changed for the managers?
The old rule measured each fund against the industry average and was repealed. Each manager now sets its own allocation within regulator ranges and is measured against its own reference portfolio.
Connected Coverage
Sources: Superintendencia de Pensiones, Resolución Exenta Nº 1195 of 1 September 2026 and accompanying press release; Ley 21.735 of 26 March 2025; Superintendencia de Pensiones monthly statistics for July 2026; Diario Financiero; La Tercera.
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