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The Chilean pension withdrawals and the 2025 reform: Fiscal and retirement consequences

Alejandra Inzunza & Carlos Madeira

Journal of Pension Economics and Finance2025https://doi.org/10.1017/s1474747225000058article
AJG 2ABDC B
Weight
0.46

Abstract

During the COVID-19 pandemic, Chile enacted three exceptional laws allowing withdrawals from affiliates’ pension accounts. We analyze how these withdrawals affected pension savings and the projected retirement income of affiliates and their households, finding that lower-income households withdrew a higher percentage of their savings. Simulations of worker contributions until retirement show an average reduction of 21% in contributory pensions, but increased non-contributory pension benefits reduce the average total income loss to 8%. Under a no-reform scenario, these withdrawals and higher non-contributory pensions may imply fiscal costs around 15.8% of the pre-pandemic gross domestic product (GDP). The current pension reform should reduce it to 12.4% of pre-pandemic GDP.

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https://doi.org/https://doi.org/10.1017/s1474747225000058

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@article{alejandra2025,
  title        = {{The Chilean pension withdrawals and the 2025 reform: Fiscal and retirement consequences}},
  author       = {Alejandra Inzunza & Carlos Madeira},
  journal      = {Journal of Pension Economics and Finance},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1017/s1474747225000058},
}

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The Chilean pension withdrawals and the 2025 reform: Fiscal and retirement consequences

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Evidence weight

0.46

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.37 × 0.4 = 0.15
M · momentum0.60 × 0.15 = 0.09
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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