Drop in profitability and increase in risk for pensions funds in Costa Rica

The funds had high profitability and low risk last year in November, but the same month this year the profitability dropped and the risk increased.

Monday, December 15, 2008

In November 2007, net profits (not including commissions and inflation) for the eight operators administrating the pension funds were above 4%. In November of this year, most of them were below 2%.

Regarding the volatility of the results, it was at between 1.5% and 4% in November last year, while in November this year, volatility was between 6% and 9.3%.

The complementary pension funds handle approximately $2.5 billion from close to 1.7 million workers.

More on this topic

Pension Operators Less Profitable

November 2017

Profits of the six complementary pension fund managers that operate in Costa Rica fell by 17% between June 2016 and the same month of this year.

The figures in the report "Development and Supervision of the Pensions sector" shows that as of June 2016, the six complementary pension operators in Costa Rica reported net income of $11.8 million, while in the same month of this year, earnings dropped to $9.8 million

Workers Lend Cheap Money to the State

February 2014

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.

Costa Rican pension funds sacrifice profits to gain clients

May 2008

A fall in the yields of Costa Rican pension funds, and increases in their costs, are hitting their profits. Pension fund members are losing out too, indirectly.

The pension funds racked up 2.5 billion colons (US$8 million), some 3 billion colons less than in the same period of last year. Most funds say they are having to spend more to attract members and hold on to them.

Operators pension resent low yields

March 2008

The low yields hit the income received by the operators of pensions (OPC), and thus their profits.

Revenues from the OPC-together-were reduced by 21% in the past year, going from ¢ 3,580 million in February 2007 to ¢ 2,810 million in the past month.

The Carriers Revenues come from the commission on yields they apply to pensions obligatorias.

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