Pension Fund to Finance Infrastructure

Up to $372 million of the state pension scheme could be invested in public infrastructure projects in Costa Rica.

Wednesday, April 13, 2016

Funding public works using Costa Rica's national savings funds saw a new and positive development in matters relating to the management of resources in the economy. The Board of Directors of the Costa Rican Department of Social Security approved a policy that allows allocation of up to $375 million of the reserves from the regime for Disability, Old Age and Death (IVM by its initials in Spanish) to be invested in public infrastructure projects, reported Nacion.com.

See also: "Costa Rica: Investment Funds for Public Works"

"... The new Investment Policy of the IVM allows it to place up to 10% of the reserve funds in public works, confirmed Jaime Barrantes, Pensions Manager at the CCSS. In addition, managers gave the green light to allocate up to 1% of the money in the IVM to the acquisition of securities issued abroad, ie ¢20,000 million ($37 million)."

See also: "Costa Rica: Trusts for Transport Infrastructure"

"... Barrantes explained that now the IVM Investment Regulation must be reformed to implement the authorizations and the use of resources for public infrastructure will be gradual and will depend on the development of public work trusts projects in the country. Currently, 96% of IVM reserves are invested in the Ministry of Finance and the Central Bank (BCCR) debt bonds."



More on this topic

Costa Rica: Trusts for Transport Infrastructure

March 2016

A bill has been presented to finance, build, operate and maintain transport infrastructure using trusts.

From the Law project "An Act authorizing the development of transport infrastructure through trusts":

There is a need to rethink the model for financing infrastructure, taking into account the fact that these investments impact on growth expectations for competitiveness.

Costa Rica: Pensions to Finance Public Works

February 2016

Consideration is being given to the possibility of using resources from the country's main pension fund to finance public infrastructure construction works.

The plan developed by Pensions Manager at the Costa Rican Social Security Department (CCSS) also proposes "... devoting a portion of the resources to securities abroad".

Pension Fund Could Finance Public Works in Costa Rica

November 2014

Progress is being made for the approval of a bill to authorize the use of 40% of the Pension and Retirement Funds of the Magisterium, equivalent to $1,492 million, to finance public works projects.

From a statement issued by the Board of Pensions of the National Magisterium:

Public Infrastructure Financed with Pension Funds

February 2013

93% of the $58 million raised by the securitization of future revenues of the International Airport of El Salvador were provided by Pension Funds.

Editorial

The administrators of the pension funds are obliged to invest mainly in government bonds, and this significantly affects the low returns earned by contributors in those funds.

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