Defined Contribution - there is a statutory system in Chile. Each employee has their own individual account with any one of the Pension Fund Managers ("AFPs", an abbreviation of their Spanish name: Administradora de Fondos de Pensiones). AFPs are special purpose, private companies. The employer must withhold 10% of an employee's salary (up to a statutory cap), directing it into the AFP of the employee's choice. The pension fund is not guaranteed by the employer.

In addition, from August 2025, employers must contribute to the pension fund a percentage of the employee’s remuneration. There will be a gradual increase, starting at 1% and reaching a total of 8.5% in August 2033, which the employer must contribute in addition to the 10% that is currently withheld from the employee’s remuneration.

There are no key concerns from a transaction perspective. There is no requirement for any consultation with employees. However, there is an administrative requirement to inform the applicable AFP about the change of employer, to ensure they are aware that a different entity will be withholding and paying the applicable funds into the employee's account.