Between Financial Markets and Social Security: Chile’s Pension System after the Constituent Moment

The current Chilean pension system, created in the 1980s and based on individual capitalization accounts, is experiencing a severe legitimacy crisis. Low replacement rates and retired people living barely above the poverty line, among other factors, have been causing massive protests across the country. It is highly likely that the current constitutional process will translate the claims for change into the form of a fundamental right to social security. However, the normative and institutional dimensions of those changes beyond the constitution remain unclear. The present paper explains the main complexities of the pension system and identifies the major challenges it faces in times of reform. Using an interest-group approach, the paper examines the available options of institutional design to achieve a sustainable agreement among relevant actors, and the organizational challenges public institutions will face to properly implement those agreements.