Pension-fund managers in Costa Rica step up foreign investment

Costa Rican pension-fund managers can have up 40 percent of their assets in foreign markets, following a tendency that began to be noted in May.

Tuesday, July 1, 2008

Through April of this year, the proportion of foreign funds in Costa Rican pension schemes dropped, but since May the trend has been reversed as managers fight to raise low yields on their investments.



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.

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.

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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IBP Pensiones

Organization that operates in Costa Rica.
Phone: (506) 2284-9600

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