Financial group-owned pension plan administrators are reporting billions in earnings, while those retiring on these plans feel they are being shortchanged. The pension plans paid are so low the government is spending billions on awarding complementary pensions to selected beneficiaries to compensate for the low pensions in the system. Big banks and financial companies control the AFPs.
A new comprehensive study released on Wednesday, 18 March 2026, reveals that the Dominican Republic’s Pension Fund Administrators (AFP) recorded profits of more than RD$5.93 billion in 2025. This financial success comes despite the grim outlook for contributors, whose future pensions are projected to be uncertain and, on average, will not exceed 30% of their final working wages. The situation at retirement is not worse because workers still get their severance payments from many companies.
The “Analysis of Profits and Social Cost of AFPs for 2025” carried out by the research was conducted by economist Francisco Tavárez and social scientist Matías Bosch with the collaboration of the Faculty of Economic and Social Sciences of the Autonomous University of Santo Domingo (UASD), its Institute of Socioeconomic Research (INISE), the Juan Bosch Foundation, and Proyecto + Derechos, in collaboration with the Coalition for Dignified Social Security.
Legislative shielding and revenue growth
Law No. 13-20 passed during the PLD administration of former President Danilo Medina was touted to strengthen the Social Security Treasury (TSS) and the DIDA provisions as originally established in Law 87-01. The law was signed in February 2020, just months before the administration change. As was warned at the time of the review of the bill in Congress, the law has mostly worked to bolster the operational income of AFPs. The new study indicates that the profits of the AFPs became effectively “shielded” against financial market fluctuations. As a result, annual revenues have climbed steadily, reaching more than RD$11.56 billion in 2025.
Similarly, AFP net utilities have maintained an upward trajectory, rising from more than RD$4.38 billion in 2020 to RD$5.93 billion in 2025. This represents an average annual growth rate of 6.2%, nearly triple the growth rate of the overall Dominican economy.
The Dominican Social Security AFP system is 25 years old. Several attempts to reform the system to better distribute the earnings and increase worker pensions have failed throughout the past governments, regardless of who is in control in Congress.
Profitability disparities: AFPs vs. contributors
The study highlights a stark contrast in financial returns:
Contributors: See a real return of only 4.4% on their personal funds.
AFP Financial Profitability (ROE): Stands at 24.9%, compared to 17.7% seen in commercial banks.
AFP Economic Profitability (ROA): Reached 19.9%, significantly higher than the 2.3% reported by the banking sector.
The rising “social cost” of the Pension System
The report emphasizes that the high profits were obtained even when the operational expenses, which are funded directly by the managed pension assets, increased at an even faster pace, with an average annual growth of 13.7% between 2020 and 2025. These expenses reached more than RD$7.19 billion in 2025, actually surpassing the administrators’ net profits.
According to the document, the combined total of profits and operating expenses resulted in an annual social cost of RD$13.13 billion for 2025.
Since the inception of the current system, the accumulated social cost has reached RD$126.48 billion. The authors note this figure does not include the interest lost by contributors on investments that resulted in losses.
The data is expected to serve as a critical point of discussion for policymakers and labor advocates who argue that the current social security model prioritizes administrative profitability over the financial stability of the retired workforce. Nevertheless, the government and the ruling party-majority Congress have still not moved to make changes in the Social Security Law to benefit the general workforce.
In the meantime, the Abinader administration has stepped up the award of comfortable pensions to a select few. Recently, spokespeople for the opposition political party PLD, revealed spending for the solidarity pensions is up significantly. While in 2020, the year the PLD ended its administration, the government spent RD$43.35 billion on “solidarity pensions,” by 2026, now in the Abinader administration, the spending on the solidarity pensions had climbed to RD$62.22 billion. The PLD says this is not sustainable for government finances.
Law 87-01 on Social Security was passed during the Hipolito Mejia (PRD) administration and the intent was to check the results and make changes at the 10-year mark.
Read more in Spanish:
Somos Pueblo
El Nacional
18 March 2026