Decree-Law 3,500 was published in November 1980, establishing a new system of old-age, disability and survivorship pensions based on workers' savings and their capitalization in individual accounts.

The new Pension System incorporates the concept that the workers who are enrolled in the system actually own their social security savings, stressing the close relationship between the effort made by a person to save throughout his or her active life and the old-age, disability and survivorship benefits that he or she receives.

It also introduces the management of savings by private companies (AFPs), which have a single corporate purpose and the role of providing social security benefits and services. The legal framework regulating these institutions is dictated by the Superintendency of AFPs, which also inspects the companies to ensure that they are run correctly.