2014News

Pension plan is big business

The pension plan companies are reaping yields worth triple what they are paying their clients, as reported in Diario Libre. As of September, the AFPs had profited by 35.20% while the average yield paid to contributors to the system has been 12.27%. In their third quarterly report, the Superintendence of Pensions (SIPEN) said that together the five AFPs had profits of around RD$2.59 billion. Because of their high profitability, the pension companies accepted a complementary reduction of their profit schemes to lower this to 25%.

The report also highlights the bureaucratic difficulties of changing from one pension plan to another. As a result, in 2012 only 0.3% of the affiliates were able to change plan. Of those that have left the system, 48,490, on average they received RD$76,534.58 as life savings.

As of September 2014, the pension fund was at RD$291.35 billion belonging to around three million registered contributors, but only 48.13% actually pay into the system, as reported and attributes this to work instability.

http://www.diariolibre.com/economia/2014/11/17/i885901_afp-ganan-casi-tres-veces-que-afiliados-por-fondos-pensiones.html