OECD Pension Report: Chile Climbs from 34th to 19th Place in Four Years, Highlighting Reform Led by Jeannette Jara

Original article: Informe OCDE de pensiones: Chile pasa del lugar 34 al 19 en cuatro años, destacando reforma que encabezó Jeannette Jara

Chilean Pension Reform Highlighted by OECD in «Pensions at a Glance 2025» for Enhancing Pensions and Narrowing Gender Gap

Image: Jeannette Jara as the Minister of Labor. Internet Archive

The Organization for Economic Co-operation and Development (OECD), in its annual report «Pensions at a Glance 2025«, has praised the Chilean pension reform for significantly enhancing pensions for older women, narrowing the gender gap, and increasing replacement rates. The recently released document notes that key elements of this system modernization—approved in January of this year—include raising mandatory contributions, creating redistributive components, and increasing the Guaranteed Universal Pension (PGU).

As a direct result of these measures, Chile has made a significant leap in the OECD rankings, moving from 34th place in 2021 to 19th in 2025. This improvement is attributed to changes that benefit current retirees, particularly low-income individuals and women, along with a gradual increase in employer contributions, set to rise from the current 1.5% to 8.5% by 2034, enhancing future pensions. The report projects that this will bring the Chilean system closer to the organization’s average.

The report also contextualizes this progress within the rapidly aging population in Chile, where the working-age population is expected to decrease by 23% over the next four decades, compared to an average decline of 13% in OECD countries. Among the specific benefits set to be paid between 2025 and 2026, a notable compensation in annuities for women due to their higher life expectancy is highlighted—previously absent—which will improve the net replacement rate by as much as 61%.

Furthermore, the reform introduces substantial enhancements to access the PGU. Starting in September 2025, individuals aged 82 or older will receive a PGU of 250,000 pesos (around $260). After 18 months from the law’s publication, the access age will drop to 75 years, and eventually be set at 65 years, expanding coverage for elderly individuals with lower pensions.

Jeannette Jara: «Changes Are Achieved through Action, Not Speeches»

The former Minister of Labor, who oversaw the approval of this reform, Jeannette Jara, currently a presidential candidate, stated on her social media: «This Friday, I want to reaffirm something very important with you: In Chile, changes are achieved through action, not speeches (…). And I say this with authority because I have been where things really happen.»

She added: «As Deputy Secretary under President Bachelet’s government, I promoted concrete policies that improved the lives of millions: Chile Grows with You, the PGU, and a pension reform recognized by the OECD. And as Minister, I did it again: a 40-hour workweek, the highest minimum wage in history, and a serious pension reform.»

She also noted: «I know how to make things work. I know when to accelerate, when to correct, and most importantly, when to change what doesn’t work. I don’t act alone, but I also don’t wait for orders: I decide with responsibility, with experience, and with the families of Chile in mind.»

She concluded her message with: «Chile needs stable, prepared leadership that knows how to deliver. And here I am. Because when Chile speaks, I listen. And when I commit, I deliver.»