We are often asked how you can achieve the early retrieval of your AFP funds. The process has certainly become harder over recent years with most people encountering obstacles to their attempts. In response, we have asked our long-term partner, Maria Fally of MEFE Consult, to provide you with some basic tips on the AFP recovery process. She provides context to the situation and a summary of the necessary documentation you need to gain access to your funds.
A refund can be requested regardless of whether you are still living and working in Chile or indeed if you have left and have no intention of travelling back to Chile.
Please continue reading if you are interested in accessing money that you may have thought was lost.
1) Yes, it is a hassle, involving a lot of paperwork and bureaucracy. The law 18.156 clearly states the requirements and all AFP companies should comply with the same procedure. You can view the actual law here.
2) You can access your funds while you remain employed and there is also no need to leave the country. If you meet the requirements of law 18.156, there is no need to continue paying social contributions in Chile once you exit the Chilean system. You should carefully consider this as it will likely impact sickness and maternity leave coverage.
3) To retrieve funds, you are required to meet some key requirements:-
1) That you are a foreign technical worker with no Chilean nationality/passport.
2) Your employer needs to understand the interpretation of the law and they also need to add the necessary clause in your work contract.
3) You can demonstrate your status as a “technical foreign worker”.
4) You can provide proof of overseas social security/private coverage for the key provisions of Chilean social security.
4) Depending on your nationality, the biggest challenge is the documentation (certificate) to confirm social security contributions/coverage (for pension, sickness, death and disability) outside of Chile (does not have to be your home country) during your term of employment.
If you are able to prove that coverage is in place before you start working in Chile, please feel free to contact us as we have a very positive solution for you.
5) You will need to get your professional degree (higher education/university or similar) recognized and legalized. This process is quite specific and you should start on this as soon as possible as this can take a long time.
If you need further guidance on that topic, please feel free to contact us.
6) According to an official statement we received from the Superintendencia de Pensiones (February 2019) the law 18.156 only applies to professional technical employees (with a current work contract). AFP funds cannot be accessed/retrieved by independent workers (those issuing “boletas de honorarios”) meaning that the current obligatory contributions by law 21.133 stay in the AFP until retirement age. There are some exceptions, read further details here.
7) There is no need to demonstrate an end of your work contract (“finiquito”). You must make sure that you request the addition of the necessary clause to all of your current/past employment contracts in Chile.
If you have left Chile and your Chilean ID has expired, you can complete the process with your passport (and sometimes the AFP do request your birth certificate in addition).
8) Once you have successfully recovered your AFP funds, you are exempt from making future contributions, even if you change employers. In case you decide to “re-enter” the system (because you would like to benefit from maternity leave coverage for example), your employer can start paying into the AFP again on your behalf.
You should note that under our understanding, a second withdrawal of your funds would not be possible and funds would be locked in the AFP until your retirement age (women at the age of 60, men at 65 years).
If you are reading this before arriving in Chile, you can certainly consider avoiding the AFP altogether. There are many considerations to this, most importantly how this could impact sick leave and maternity leave payments. The team at EBG would be more than happy to discuss your options with you.
You can complete the withdrawal process by yourself, you do not need to hire a lawyer as the requirements are stated in the law. That said, you may find it a lot easier to engage a professional such as MEFE to manage this process for you. There is a great degree of inconsistency in process between AFP companies and it helps to have someone with experience review your documents prior to submission.
If you have already left Chile but would still like to access your funds before retirement, we are also able to help so please feel free to contact us.
We are leaving the country and my husband wants to retire his AFP money. He was fired on December 2019 and has been unemployed since then. He was hired with a visa sujeta a contrato in the USA , but the contract wasn’t for foreigners and did not include the anexo with AFP specifications. He does have money in his SSA account in the states, but the agency does not provide for the specific certificate his AFP requieres. Please, we need advise on how to retire the money or sue the Superintendencia de Pensiones.
Thank you for your comment Jennifer. If you would like to fill out the contact form above then we will get in touch for a one to one call. That will help us fully understand your situation and offer appropriate, personal guidance.
Kind regards,
Chris
Hi, thanks for the article.
I would like to know what happens to cotizations after having received the afp but sill working in a company. Should I receive that amount in my net salary or it goes to my old afp locked for life ?
Hi Thomas,
Thanks for your question – in essence, that choice should rest with you. The law that lets you remove funds also opts you out of future payments. We are able to provide you with tax efficient retirement alternatives to ongoing AFP payments. You would also be able to simply receive the payment in your salary. There are a few key considerations around this – the point around licencia medica being a key one.
I worked in Chile on an overseas assignment for an American Company for 4 years in the late 80’s / early 90’s and paid into an AFP. In 2010 after retirement, I came to live in Chile as a permanent resident ( not citizen ) although our children are living in the US. The AFP account has grown to a good balance and I would like to know if there is a way to withdraw the total.