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.

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.