Chile Statutory and Private Employee Benefits, 2023 Update
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Chile Statutory and Private Employee Benefits Overview
Chile was one of the first countries in the Americas to set up state-sponsored social security coverage. The country’s pension system consists of multiple pillars – a non-contributory first pillar, a fully-funded second pillar, and a voluntary third pillar. Chile has a comprehensive social security system that protects citizens from illness, disability, old age, unemployment, and poverty. The social security system aims to protect the most susceptible population groups by providing services and benefits to families with children assessed by the census as being part of the poorest 60% of the population. Families living in poverty are provided with social support and solidarity pensions.
The Chile employee benefits report provides in-depth industry analysis, information, and insights into employee benefits, an overview of the state and compulsory benefits, detailed information about the private benefits, insights on various central institutions responsible for the administration of the different branches of social security and the regulatory framework of the employee benefits in Chile.
Key Regulations | · The Law on Social Insurance and Health Insurance of 1952
· The Law on Social Assistance of 1975 · The Decree on Individual Account Scheme of 1980 · The Law on Social Security Reform of 2008 · The Law on the National Health System of 1979 and its amendment of 2004 · The Law on the Public Health System of 1985 · The Law on the Private Health System of 1990 · The Law on Extended Parental Leave of 2011 · The Law on Work Injury and Professional Diseases of 1968 · The Law on Unemployment of 1981 · The Law on Severance Account System of 2001 · The Law on Family Allowances for Low-income Persons of 1981 and its amendment of 1996 · The Law on Wage Earners and Salaried Employees of 1981 and its amendment of 1999 · Law No.16,744 on labor accidents and professional illnesses |
Key State and Compulsory Benefits | · Retirement Benefits
· Death in Service · Long-Term Disability Benefits · Short-Term Sickness Benefits · Medical Benefits · Workers’ Compensation Insurance · Maternity and Paternity Benefits · Other Benefits |
Key Private Benefits | · Retirement Benefits
· Death Benefits · Medical Benefits · Disability Benefits · Accidental Death and Dismemberment Benefits · Other Benefits |
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Employee Benefits Regulations in Chile
The various employee benefits laws that are applicable in Chile are:
- The Law on Social Insurance and Health Insurance of 1952
- The Law on Social Assistance of 1975
- The Decree on Individual Account Scheme of 1980
- The Law on Social Security Reform of 2008
- The Law on the National Health System of 1979 and its amendment of 2004
- The Law on the Public Health System of 1985
- The Law on the Private Health System of 1990
- The Law on Extended Parental Leave of 2011
- The Law on Work Injury and Professional Diseases of 1968
- The Law on Unemployment of 1981
- The Law on Severance Account System of 2001
- The Law on Family Allowances for Low-income Persons of 1981 and its amendment of 1996
- The Law on Wage Earners and Salaried Employees of 1981 and its amendment of 1999
- Law No.16,744 on labor accidents and professional illnesses
For more insights on employee benefit regulations in Chile, download a free report sample
Chile Employee Benefits Segmentation by State and Compulsory Benefits
The key state and compulsory benefits offered by employers in Chile are retirement benefits, death in service, long-term disability benefits, short-term sickness benefits, medical benefits, workers’ compensation insurance, maternity and paternity benefits, and other benefits.
Retirement Benefits: Chilean retirement benefits (old-age pensions) are divided into mandatory individual accounts, social insurance, social assistance, and a universal system. The pension system in Chile is based on individual capitalization, which consists of a Non-Contributory Solidarity Pillar (PBS) for poor people, Mandatory Contributory Pillar for workers managed by the Pension Fund Administrators (AFPs), and a Voluntary Savings Pillar with three different plans that include Voluntary pension savings (APV), Collective Voluntary pension savings (APVC), and the Voluntary Savings Account.
Workers’ Compensation Insurance: Chilean workmen’s compensation insurance (work injury benefits) is a part of the social insurance system and the Law on Work Injury and Occupational Diseases of 1968 and Law on Social Security Reform of 2008 regulate it. The Superintendent of Social Security of the Ministry of Labour and Social Security oversees general supervision, and the Occupational Safety Institute administers the program.
Maternity and Paternity Benefits: Chilean maternity and paternity benefits are regulated by the Law on National Health System of 1979 with amendments from 2004, the Law on Public Health System of 1986, the Law on Private Health System of 1986, and the Law on Health Guarantees 2004. It is divided into social insurance (public) and mandatory private insurance systems.
To know more about state and compulsory employee benefits in Chile, download a free report sample
Chile Employee Benefits Segmentation by Private Benefits
The key private benefits offered by the employers of Chile are retirement benefits, death benefits, medical benefits, disability benefits, accidental death and dismemberment benefits, and other benefits.
Retirement Benefits: Due to Chile’s comprehensive social security system, companies usually do not provide retirement benefits. However, after the implementation of a new pension fund rule in March 2002 − Ahorro Previsional Voluntario (Voluntary Pension Savings, APV) − and APVC on October 1, 2008, employers are permitted to organize additional plans for employees. Employees can make voluntary contributions to this scheme.
Medical Benefits: In Chile, health insurance is compulsory for workers in the formal sector, and retirees are required to purchase private or public health insurance contracts. Individuals with lower incomes generally join FONASA, and higher-income people typically enroll in an ISAPRE.
Disability Benefits: In Chile, long-term disability benefits are provided under the retirement system. Eligible workers are entitled to disability benefits through the National Disability Insurance System. The system is funded by social security contributions paid by the employer and the employee.
To know more about private employee benefits in Chile, download a free report sample
Scope
This report provides a detailed analysis of employee benefits in Chile –
- It offers a detailed analysis of the key government-sponsored employee benefits, along with private benefits.
- It covers an exhaustive list of employee benefits, including retirement benefits, death in service, long-term disability benefits, medical benefits, workmen’s compensation insurance, maternity and paternity benefits, family benefits, unemployment benefits, long-term care benefits, leaves and holidays, and private benefits.
- It highlights the economic and regulatory situations relating to employee benefits in Chile.
Key Highlights
• Superintendent of Pensions(Superintendencia present, SP), Institute of Social Security (Instituto de Previsión Social, IPS), Pension Fund Managers (Administradoras de Fondos de Pensiones, AFP) and Unemployment Funds Manager (Administradora de Fondos de Cesant´ıa, AFC) organizations are responsible for the functioning of the overall social security system.
• A person’s national insurance contribution is determined based on their income.
• An insured person who is unemployed or unable to work and whose benefits have been exhausted is entitled to a credited contribution.
• In Chile, employers provide voluntary retirement benefits to their employees through employer-sponsored pension plans and group life insurance.
Reasons to Buy
- Make strategic decisions using in-depth information related to employee benefits in the country.
- Assess employee benefits of the market, including state and compulsory benefits and private benefits.
- Gain insights into the key employee benefit schemes offered by private employers in the country.
- Gain insights into key organizations governing the employee benefits market, and their impact on companies.
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Frequently asked questions
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What are the key regulations guiding employee benefits in Chile?
The key regulations guiding employee benefits in Chile are The Law on Social Insurance and Health Insurance of 1952, The Law on Social Assistance of 1975, The Decree on Individual Account Scheme of 1980, The Law on Social Security Reform of 2008, The Law on the National Health System of 1979 and its amendment of 2004, and The Law on the Public Health System of 1985 among others.
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What are the key state and compulsory benefits for employees in Chile?
The state and compulsory benefits for employees in Chile are retirement benefits, death in service, long-term disability benefits, short-term sickness benefits, medical benefits, workers’ compensation insurance, maternity and paternity benefits, and other benefits.
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What are the key private benefits for employees in Chile?
The private benefits for employees in Chile are retirement benefits, death benefits, medical benefits, disability benefits, accidental death dismemberment benefits, and other benefits.
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