Santiago Court of Appeals Orders AFP Modelo to Return Pension Savings to Ecuadorian Worker After Unlawful Denial

An Ecuadorian physician won a key ruling after the Santiago Court of Appeals ordered AFP Modelo to return her Chilean pension savings, overturning the administrator’s refusal as unlawful and excessively formalistic.

Santiago Court of Appeals Orders AFP Modelo to Return Pension Savings to Ecuadorian Worker After Unlawful Denial

Autor: The Citizen

The Second Chamber of the Court of Appeals of Santiago upheld a protection writ and ordered pension fund administrator AFP Modelo S.A. to return the balance accumulated in the individual capitalization account of an Ecuadorian worker who is affiliated with her home country’s social security system.

The divided ruling in case No. 14.073-2025 was issued by ministers Omar Astudillo and Rodrigo Carrasco, together with visiting attorney Cristián Parada. The court held that the AFP acted «illegal and arbitrary» by denying the petitioner’s request and by imposing requirements not contemplated in law to obtain a refund.

Case background

Ecuadorian physician S.C.G.G., through her attorney, filed the protection action after AFP Modelo S.A. rejected her May 19, 2025 request to withdraw her pension funds.

On May 27, the administrator notified her by email that the «Certificate of Benefits» issued by Ecuador’s Social Security Institute (IESS) —which she had duly apostilled— did not specify the types of coverage and only contained a generic reference: «The General Mandatory Insurance will protect affiliated persons under the conditions established in this law.» AFP based its refusal on an interpretive memo from Chile’s Superintendence of Pensions.

Court of Appeals: AFP Modelo acted unlawfully and arbitrarily

The judgment dismantled AFP’s arguments one by one, favoring the purpose of the statute over excessive formalism. The court reviewed the IESS certificate showing the petitioner has been affiliated since 2018 and that she is covered for «illness, maternity, occupational risks, old-age, death, disability, unemployment, and unemployment insurance.»

«For these purposes, the primary legal requirement is that the affiliate be covered abroad by a social security regime that provides benefits at least in cases of illness, disability, old age, and death,» the ruling states.

«In that regard, the petitioner submitted a document entitled ‘Certificate of Benefits issued by the Ecuadorian Social Security Institute (IESS)’, duly apostilled, which certifies her affiliation since 2018 and that she is protected in cases of illness, maternity, occupational risks, old-age, death, disability, unemployment, and unemployment insurance.»

On that basis, the court concluded that—contrary to AFP Modelo’s position—the plain reading of the document shows that Ecuador’s social security system meets and even exceeds the requirements of Article 1(a) of Law No. 18.156 by guaranteeing benefits in cases of illness, disability, old age, and death, among others.

The resolution goes further, underscoring that the AFP’s stance infringes the petitioner’s fundamental rights.

«Consequently —the ruling elaborates—, the document is sufficient to consider the required social security coverage proven, and it is not permissible to demand a formulation or specificity that goes beyond Law No. 18.156. The respondent’s excessively formalistic interpretation disregards the spirit of the statute and the legislature’s intent to allow foreign workers in these circumstances to access their funds. In this regard, it is relevant to consider the decision of the Illustrious Court of Appeals of Rancagua, Case Protection-300-2024, which in an analogous case deemed a similarly worded IESS certificate sufficient.»

The appellate court determined that the company’s refusal was not only unlawful but also violated constitutional guarantees:

«By failing to return the petitioner’s pension funds, AFP Modelo S.A. incurs in illegality and arbitrariness by demanding requirements not stipulated by law or by interpreting the rule restrictively to the detriment of the petitioner, thereby violating the right to equality before the law guaranteed by Article 19(2) of the Political Constitution of the Republic and the right to property guaranteed by Article 19(24), by preventing access to funds that legitimately belong to her,» the court ruled.

AFP ordered to return funds to foreign contributor

After reviewing the record, the Court of Appeals granted the protection and ordered AFP Modelo to «recognize as valid the documentation submitted by the petitioner—particularly the duly apostilled Certificate of Benefits issued by the Ecuadorian Social Security Institute (IESS)—and, on that basis, issue a new decision on S.C.G.G.’s request to withdraw pension funds in accordance with law, proceeding to the effective return of those funds.»

The administrator was given a strict 30-day deadline, counted from the date the judgment becomes final, to comply with the order.

 Read the Court of Appeals ruling


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