Classes of benefits and expenses by employee	12/31/2018		12/31/2017
	ThUS$		ThUS$
Current
Profit sharing and bonuses		20,085		22,421
Total		20,085		22,421

Non-current
Profit sharing and bonuses		8,831		6,487
Severance indemnity payments		28,233		27,445
Total		37,064		33,932

Short-term benefits for active employees are represented by salaries, social welfare benefits, paid time off, sickness and other types of leave, profit sharing and incentives and non-monetary benefits; e.g., healthcare service, housing, subsidized or free goods or services. These will be paid in a term which does not exceed twelve months.

The Company only provides compensation and benefits to active employees, with the exemption of SQM North America, which applies the definitions under 17.4 below.

SQM maintains incentive programs for its employees based on their personal performance, the Company’s performance and other short-term and long-term indicators.

For each incentive bonus delivered to the Company’s employees, there will be a disbursement in the first quarter of the following year and this will be calculated based on profit for the period at the end of each period applying a factor obtained subsequent to each employee’s appraisal process.

Employee benefits include retention bonuses for the Company’s executives, which are linked to the Company’s share price and are paid in cash. The short-term portion is presented as a provision for current employee benefits and the long-term portion as non-current.

Staff severance indemnities are agreed and payable based on the final salary, calculated in accordance with each year of service to the Company, with certain maximum limits in respect of either the number of years or in monetary terms, In general, this benefit is payable when the employee or worker ceases to provide his/her services to the Company and there are a number of different circumstances through which a person can be eligible for it, as indicated in the respective agreements; e.g., retirement, dismissal, voluntary retirement, incapacity or disability, death, etc.

Law No,

19,728

published on May 14, 2001 which became effective on October 1, 2002 required “Compulsory Unemployment Insurance” in favor of all dependent employees regulated by the Chilean Labor Code. Article 5 of this law established that this insurance is paid through monthly contribution payments by both the employee and the employer.

The other long-term benefits relate to staff severance indemnities and are recorded at their actuarial value, a

nd an executive compensation plan (see Note 18.6).

Staff severance indemnities at actuarial value	12/31/2018		12/31/2017
	ThUS$		ThUS$
Staff severance indemnities, Chile		27,562		25,893
Executive severance plan		8,831		6,487
Severance for foreigners		671		1,552
Total other non-current liabilities		37,064		33,932

The actuarial assessment method has been used to calculate the Company’s obligations with respect to staff severance indemnities, which relate to defined benefit plans consisting of days of remuneration per year served at the time of retirement under conditions agreed in the respective agreements established between the Company and its employees.

Under this benefit plan, the Company retains the obligation to pay staff severance indemnities related to retirement, without establishing a separate fund with specific assets, which is referred to as not funded. The discount interest rate of expected flows to be used was

4,89

The staff severance indemnity benefit relates to remuneration days for years worked for the Company without a limit being imposed in regard of amount of salary or years of service. It applies when employees cease to work for the Company because they are made redundant or in the event of their death. This benefit is applicable up to a maximum age of

for men and

for women, which are the usual retirement ages according to the Chilean pensions system as established in Decree Law

3,500

of 1980.

To determine the Company's total liability, we used computer software to develop a mathematical simulation model using the data for each individual employee.

This model considered months as discrete time; i.e., the Company determined the age of each person and his/her salary on a monthly basis according to the growth rate. This information on each person was simulated from the beginning of his/her employment contract or when he/she started earning benefits up to the month in which he/she reaches normal retirement age, generating in each period the possible retirement according to the Company’s turnover rate and the mortality rate according to the age reached. When he/she reaches the retirement age, the employee finishes his/her service for the Company and receives a retirement indemnity.

The methodology followed to determine the accrual for all the employees covered by agreements took account of the turnover rates and the mortality rate RV-2009 established by the

CMF

to calculate pension-related life insurance reserves in Chile according to the Accumulated Benefit Valuation or Accrued Cost of Benefit Method. This methodology is established in IAS 19 on Retirement Benefit Costs.

Our subsidiary SQM North America, together with its employees established a pension plan until 2002 called the “SQM North America Retirement Income Plan”. This obligation is calculated measuring the expected future forecast staff severance indemnity obligation using a net salary gradual rate of restatements for inflation, mortality and turnover assumptions, discounting the resulting amounts at present value using the interest rate defined by the authorities.

Since 2003, SQM North America offers to its employees benefits related to pension plans based on the 401-K system, which do not generate obligations for the Company.

Reconciliation	12/31/2018			12/31/2017			12/31/2016
	ThUS$			ThUS$			ThUS$
Changes in the benefit obligation
Benefit obligation at the beginning of the year		8,755			8,185			7,949
Service cost		-			2			2
Interest cost		319			359			387
Actuarial loss		63			556			200
Benefits paid		(480	)		(347	)		(353	)
Benefit obligation at the end of the year		8,657			8,755			8,185

	12/31/2018			12/31/2017			12/31/2016
	ThUS$			ThUS$			ThUS$
Changes in the plan assets:
Fair value of plan assets at the beginning of the year		8,751			7,404			7,464
Actual return (loss) in plan assets		133			1,694			293
Benefits paid		(480	)		(347	)		(353	)
Fair value of plan assets at the end of the year		8,404			8,751			7,404
Financing status		(253	)		(4	)		(781	)
Items not yet recognized as net periodic pension cost components:
Net actuarial loss at the beginning of the year		(2,614	)		(3,432	)		(3,165	)
Amortization during the year		160			219			184
Net estimated gain or loss occurred during the year		(568	)		599			(451	)
Adjustment to recognize the minimum pension obligation		(3,022	)		(2,614	)		(3,432	)

Reconciliation	12/31/2018			12/31/2017		12/31/2016
	ThUS$			ThUS$		ThUS$
Service cost or benefits received during the year		-			2		2
Interest cost in benefit obligation		319			359		387
Actual return in plan assets		133			1,694		293
Amortization of prior year losses		160			219		184
Net gain during the year		(568	)		599		610
Net periodic pension expense		(159	)		41		29

	12/31/2018 ThUS$			12/31/2017 ThUS$			12/31/2016 ThUS$
Opening balance		(27,445	)		(22,532	)		(21,995	)
Current cost of service		(1,529	)		(934	)		(1,333	)
Interest cost		(1,658	)		(1,488	)		(1,407	)
Actuarial gain/loss		(1,617	)		(1,144	)		(2,253	)
Exchange rate difference		2,710			(2,284	)		(1,215	)
Benefits paid during the year		1,306			937			5,671
Balance		(28,233	)		(27,445	)		(22,532	)

	12/31/2018			12/31/2017			12/31/2016

Mortality rate		RV - 2014			RV - 2014			RV - 2009
Actual annual interest rate		4.642	%		5.114	%		4.522	%
Voluntary retirement rate:
Men		6.49	%		6.49	%		7.16	%	annual
Women		6.49	%		6.49	%		7.16	%	annual
Salary increase		3.00	%		3.00	%		3.60	%	annual
Retirement age:
Men		65			65			65		years
Women		60			60			60		years

As of December 31, 2018 and December 31, 2017, the Company has conducted a sensitivity analysis of the main assumptions of the actuarial calculation, determining the following:

Sensitivity analysis 12/31/2018	Effect + 100 basis points ThUS$			Effect - 100 basis points ThUS$
Discount rate		(1,807	)		2,033
Employee turnover rate		(237	)		265

Sensitivity analysis 12/31/2017	Effect + 100 basis points ThUS$			Effect - 100 basis points ThUS$
Discount rate		(1,991	)		2,436
Employee turnover rate		(252	)		281

The Company currently has a compensation plan with the purpose of motivating the Company’s executives and encouraging them to remain with the Company, by granting payments based on the change in the price of SQM’s shares. There is a partial payment of the share benefit program in the event of termination of the contract for causes other than the resignation and application of Article 160 of the Chilean Labor Code.

A total of 37 Company executives are entitled to this plan, provided that they continue to work for the Company through to the end of 2020. The payment dates, if applicable, will be during the first quarter of 2021.

The effect of the plan considers

476,302

shares reflected as a cost of ThUS$

3,754

in the results for the period ending December 31, 2018. As of December 31, 2017, the effect of the plan was

533,476

shares, equal to ThUS$

6,487

in costs in the profit or loss for 2017.