The economists at the Santo Domingo Technological Institute (INTEC) do not see a rosy future for the pension fund administrators (AFPs) and their customers. In their opinion, these fund administrators that at present enjoy high profits risk bankruptcy because the bulk of the workers’ savings are invested in government bonds that are threatened by the growing national debt.
“Trying to read the future is like reading a crystal ball, but this is a possibility that we have to consider,” said Carlos Ramos of INTEC. He said if oil prices were to shoot up, this could force the government to subsidize the electric sector, and this could cripple the pension funds. Ramos, together with well-known economist Pavel Isa Contreras, argued for a Fiscal Pact that would focus on the relocation of the current tax structure in order to guarantee continued economic growth.
A recent Juan Bosch Foundation study shows at present the situation is already bleak for pension plan holders.
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Diario Libre
Juan Bosch Foundation
8 April 2019