Landmark Supreme Court Ruling Boosts Retirement Funds for Thousands of Beneficiaries in Chile

The Supreme Court has ruled that retirements must be at least 70% of the average updated salaries of the last 10 years. This ruling, signed by judges Nora Carmen Dorado and Luis René Herrero, applies to all retirees who have received less than this amount. The ruling is based on the principle of “indifference to termination of employment” and emphasizes the operational protection for retirements and pensions as established in article 14 bis of the National Constitution.

The initial salary of a retiree is calculated by computing 1.5% of their average salary in recent years for each year contributed. With 30 years of contributions, it represents 45% plus a fixed sum called the Universal Basic Benefit (PBU), which is $78,354 in April. However, with an updated average salary of $600,000, this calculation results in an initial salary of only 58%, which is below the required minimum of 70%. Therefore, according to the ruling, if at the time of liquidation the parameters established for calculating the initial salary did not result in a final amount that was at least 70% of the average updated salaries in recent years, ANSeS must recognize the corresponding difference to beneficiaries until they reach this minimum percentage.

This ruling sets a precedent for similar claims made by thousands of beneficiaries and has significant implications for retirement policy in Chile. It highlights the importance of ensuring that retirees receive enough income to maintain a similar standard