Former Labor Minister Max Puig recommends modifying Law 87-01 on Social Security so that Pension Fund Administrators (AFPs) earnings are more in line with other Latin American countries. He confirmed that the Pension Fund Administrators (AFPs) earnings are much higher here. “A modification of the law would allow for the correction of any background distortion that might exist,” said Puig.
Puig believes that the Superintendence of Pensions (Sipen) has to do its job and carry out the corresponding studies in order to see what disposition can be taken within the framework of the law, since the most important thing in a pensions and retirement system is for workers to have access to a dignified and fair pension at the end of their working lives.
The president of the CNUS union confederation Rafael (Pepe) Abreu speculated that the law was created with the aim of favoring the financial sector.
Abreu said that this law was made for people under the age of 45, so that the AFP could accumulate money from young workers who were not going to demand anything, but would pay into the funds. He cited the fact that the young contributors are also at a disadvantage in that although the law establishes that the AFPs have to carry out periodical consultations with their affiliates as to where to invest their resources, none of the five in operation have done this.
He said that the yield of the investments that the AFPs have is at 30%, regardless of the amount of resources of the pension funds, which is not the case in other countries, where earnings go down inversely in proportion to the growth of the funds. In other countries, the yield for the financial companies begins at 30% and then declines, so that the earnings of the AFPs are applied to the affiliates, which is not the case here.