The 1981 reform of the Chilean pension system was revolutionary at its time. It was the first instance of a mature public Pay-As-You-Go social security system being converted into a mandatory defined contribution system managed by the private sector. This paper contends that a unique confluence of events were responsible for this change. The rise of a dictatorship in Chile, a struggling public retirement system, and a cadre of Chicago oriented economists determined to make Chile a model free market neoliberal economy. This was later followed by the Washington Consensus and the promotion of Chilean reform by the World Bank. This paper analyzes the Chilean reform and its subsequent development; evaluating it on both efficiency and equity grounds. While the evidence for efficiency gains is mixed there is little doubt that equity has suffered under the new system. Nevertheless, it continues to evolve and equity concerns are increasingly being addressed.