By: HUB’s EB Global Benefits Team

What is it about?

Governments around the world continue to reform retirement systems in response to aging populations, increasing life expectancy, workforce shortages, stagnant economic growth and mounting fiscal pressures. Recent legislative developments in Chile, Belgium, Japan and Spain are representative of government measures imposed on employers designed to address current and projected shortfalls in pay-as-you-go public pension systems.

Although each country has adopted a different approach, the reforms collectively introduce new financial obligations, expanded incentives for delayed retirement and, to a lesser extent, corrections on disparities between genders.

Chile: a more expensive mixed pension system

Chile is widely recognized as a pioneer in privatizing social pensions through a defined contribution model based on individual capitalization, with a significantly reduced role for the government in providing public pension benefits. Hence, it is surprising that it is fundamentally reshaping its retirement system by transitioning to a mixed defined contribution/defined benefit model, with the latter being managed by government.

The reform establishes a new public social security pillar administered by the Autonomous Pension Fund Administrator (AFAPP), while maintaining individual accounts managed by the existing AFPs. Beginning last year, employers became responsible for making mandatory contributions to the new system, initially at 1% of employees' taxable earnings, with the contribution rate gradually increasing to 8.5% by 2033. The reform also expands the Universal Guaranteed Pension (PGU) and introduces two new benefits financed by the Social Security Pension Fund (FAPP) to recognize years of contributions and to reduce inequities between genders. 

Additional measures scheduled for implementation over the coming years include transferring disability and survivors' insurance to public administration.

Belgium: new taxation of supplementary pensions

Belgium has introduced several fiscal measures affecting supplementary pensions as part of broader efforts to reinforce pension financing.

Since January 2026, a new 2% solidarity contribution applies to supplementary pension payments and the Wijninckx contribution, an employer levy designed to discourage the excessive accumulation of occupational pension benefits, has increased from 3% to 12.5%. Looking ahead, an additional 2% solidarity contribution will apply to supplementary pension benefits exceeding EUR 150,000 beginning July 2027.

Japan: social security reform expands coverage

Japan has adopted comprehensive social security reforms designed to expand pension coverage, improve retirement adequacy and encourage longer workforce participation.

Japan's pension reform act, effective in stages from April 2026, broadens Employees' Pension Insurance (EPI) eligibility to more part-time employees and smaller employers, with the company-size threshold phasing out over the following years, beginning around 2027, while progressively raising the salary ceiling used to calculate contributions. Separately, the reforms are expected to raise the maximum participation age for the individual defined contribution (iDeCo) pension program from 65 to 70 in late 2026 or early 2027. Employers should anticipate further regulatory guidance and phased compliance obligations as these reforms take effect.

Spain: flexible retirement/longer working lives

Spain continues its strategy of promoting longer working lifetimes through enhancements to its flexible retirement framework. Effective August 2026, the framework expands opportunities for retirees to combine employment with pension benefits by allowing pensioners to work between 33% and 80% of full-time hours while receiving a partial pension.

In addition, the framework clarifies the treatment of pension supplements, preserves healthcare and social protection coverage during flexible retirement and modifies aspects of delayed retirement arrangements.

Impact on companies

  • Employers across multiple jurisdictions will be subject to higher social pension contributions and additional administrative complexities.
  • More complexity in workforce planning, retirement timing, particularly in jurisdictions encouraging longer workforce participation.
  • Multi-year implementation timelines will require additional budgeting efforts and adjustments of pension administration, payroll systems and benefit strategies.

Suggested employer action

  • Evaluate the financial and operational impact of increased employer social pension costs.
  • Review retirement and pension programs in the affected jurisdictions to identify compliance obligations, misalignments in total pension benefit targets.
  • Coordinate with local payroll providers, pension administrators and legal advisors regarding contribution, reporting and funding changes.
  • Assess whether employee communications or retirement planning materials should be updated to reflect the new rules and available retirement options.
  • Continue monitoring legislative developments around the world as more reforms are anticipated in many countries, especially those with older populations in Asia and Europe.

If you have any questions, please contact your HUB advisor. View more updates in our Global Benefits Directory.