Pension Fund Administrator (Chile)

The Pension System is managed by private institutions known as Pension Fund Administrators (AFPs). These are public limited companies, whose exclusive purpose is the management of a Pension Fund and the development of other activities strictly related with the social security field, in addition to granting and administering the services and benefits stipulated in the law. The Administrators collect social security contributions, deposit them in the personal account of each member and invest the resources in order to be able to provide the corresponding benefits later on. They also take out an insurance policy to finance any disability and survivorship pensions that may be needed by their members. The Administrators are entitled to receive payment for their management of the Pension Funds and this is established on the basis of commissions paid at the members’ expense. The commissions are fixed freely by each Administrator and are standard for all members.