The interest rate that the Government of El Salvado pays for money from the Pension Funds is not more than 1.3%, while international investors are paid more than 7%.
Ricardo Soriano, Chairman of the Committee for the Defense of Workers Pension Fund of El Salvador (Comtradefop) reported that since the year 2006, the State has forced the Pension Fund Administrators (AFP) to invest the money belonging to Salvadoran workers in Pension Certificates, initially 30% and the 45% in 2012, money which has suffered a loss greater than $938 million each year.
The government of El Salvador has lowered the proportion of the portfolio that the Pension Fund Administrators can invest in securities of foreign companies from 20% to 10%.
The Financial System of El Salvador (SSF by its initials in Spanish) stated recently that the Administrators of Pension Funds may not invest more than 10 % in bonds or securities of foreign companies registered in the country, despite the fact that these are the entities which allow Salvadorans to earn 6% interest through investments.