Operators pension resent low yields

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

Wednesday, March 26, 2008

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.

For each receiving a ¢ 100 OPC ¢ 51 are the result of the commission on rendimientos.

En the past year, these revenues increased from ¢ ¢ 1,430 million to 2,760 million, a decline of 50% , according to figures from the Superintendency of Pension (Supen).

Over the same period, yields they pay mandatory supplementary pensions were reduced considerably when passing, on average, 23% to 7%.

This decrease is the result of the low in interest rates, which affected bonds are invested pensions, and thus the revenue they pay these funds.

More on this topic

Flexiblity in Pension Fund Investments

March 2012

Given the low returns from pension funds in El Salvador, there is discussion on removing the requirements for operators in order to invest in more instruments.

The pension fund administrators (AFP in Spanish) and the government are exploring alternatives for increasing the profitability of the pension savings system.

El Salvador: The Future of Pension Funds

February 2012

The obligation to satisfy the state’s appetite for money is compromising the profitability of pension operators and the size of contributor’s future pensions.

A statement by the Salvadoran Foundation for Economic and Social Development (FUSADES) reads:

The dilemma of pension fund investments

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

December 2008

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.

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%.

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.

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