Up to December 2012 pension management companies had a total amount of funds of $288 million, $59 million higher than the figure in 2011.
The average growth in the past year 2012, was approximately $4 million per month.
According to information from the Superintendency of Securities, as of November of the total assets that make up the private pension system, Progreso has a portfolio of $114.4 million (a 48.1% stake) and ProFuturo has a portfolio of $159.4 million (a 52.9% stake).
In the past seven years the number of brokerage houses and investment managers operating in the country has doubled, going from 35 in 2005 to 78 November 2012.
The challenge for next year is for better regulation and market supervision by the regulator, the Superintendency of Securities (VPS).
Capital.com.pa, reports that , "and it is not just a matter of budgets, rules and effective tools, but also staffing.
The acquisition of the Costa Rican National Insurance Institute (INS)'s pension operator by the Banco de Costa Rica (BCR) has been agreed by both institutions.
The stock transfer agreement signed on June 6 includes the intention to acquire a 100% stake. This agreement is subject to compliance with certain conditions and must be approved by regulatory authorities. The news was made public when the INS informed its staff.
A new pensions plan, without precedent in the world, is being prepared in Central America for micro-credit users.
The Central American and Caribbean Microfinance Network (Redcamif) is driving a pilot program, the first of its kind in the world and in the region, called Retirement Funds-Micro Pensions as an option for customers in the sector to have a pension fund.
The Salvadoran Association of Pension Funds has asked for changes in legislation to be made firm in order to increase the profitability of the savings of workers.
The Salvadoran Association of Pension Funds (Asafondos) asked President Mauricio Funes to keep his promise to carry out a second part of reforms to the pension system.
Funes offered to make the changes last month in order to raise the profitability of pension funds in light of strong criticism of the low returns paid on the contributor’s savings, reported Elsalvador.com.
With different modus operandi, the governments of Costa Rica and El Salvador are degrading the future value of workers' savings deposited with Pension Operators.
EDITORIAL
In the case of Costa Rica it is the voracity with which the Treasury has to go to the stock market in order to raise money to pay for increased spending, especially on staff salaries, leading to low yields on government bonds, which in an obligatory manner make up the portfolio of the Supplementary Pension Operators (PCO), assets which are supposed to safeguard the future value of pensions.
The government of Costa Rica is promoting a legal reform that would transfer the cost of financial supervision to banking institutions, insurance companies and pension operators.
The legal amendment was included in the Bill for the Efficient Management of Public Finances already sent to the Legislature.
So far, "the Central Bank is funding 80% of the operation of the Superintendent of Financial Institutions (Sugef), the Superintendent of Securities (Sugeval), the Superintendent of Pensions (Supen) and the Superintendent of Insurance (SUGESE)," reported Nacion.com.
While supportive of the proposed legal reforms to improve the profitability of pensions, the AFP has requested a minimum interest rate of 4% for the CIP.
The two Pension Fund Administrators (AFP in Spanish) are opposed to a limit on interest payments , because it would affect the benefits for contributors at the expense of protecting state spending.
The Salvadoran Association of Pension Fund Administrators has presented proposals to increase collection and maximize pension returns.
Among other proposals, there is a suggestion to rise the interest rate paid by the Government for the certificates that are purchased, in an obligatory fashion, using pension savings, going from an average rate of 1.49% to 4% or more.
A new reform is being prepared containing the rules governing the activities of Pension Fund Administrators, seeking to improve the profitability of the contributions for all contributors.
The Salvadoran government is preparing a second reform of the law on Pension Fund Administrators (AFP), and other possible changes.
According to the Executive’s idea, AFP’s would be allowed to invest contributors funds in foreign securities, which should lead to improved profitability of pension money and more resources to grant retirees a better pension, explained the minister of Finance, Carlos Caceres.
The reform voted in in El Salvador raises the ceiling rate on the amount of government funds that can be used to pay Social Security pensions to 45% and reduces commissions for the AFPs to 2.2%.
The Legislature increased from 30 to 45 percent the ceiling on which government funds can be used to pay for INPEP and ISSS pensions, and decreased from 2.7 to 2.2 percent commissions to the AFP on Thursday when approving reforms to the Law on Pension Savings System (SAP in Spanish).
It is expected that the Law of Pension Savings System will soon be reformed, reducing the commissions earned by AFPs from 2.7% to 2.2%.
A majority of members of the Finance Committee of the Salvadoran Legislative Assembly have endorsed amendments to the Law on the Pension Savings System. The main changes include a reduction of the commissions earned by Pension Fund Administrators (AFP in Spanish) from 2.7% to 2.2%, and allowing up to 45% of pension savings to be invested in Pension Investment Certificates (IPC in Spanish) issued by the state to pay for pensions under the previous system.
The government of El Salvador is promoting a reform to lower the percentage of commission given to the AFP from contributions, from 2.7% to 2.2% and that seeks to improve yields for contributors.
The government of El Salvador has listed a series of reforms to the pension law. One is to reduce the commission received by the AFP from 2.7% to 2.2% for each contribution in order to increase the returns to workers.
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.
Currently, the AFP is required to ensure that each investment destination has dual risk rating and is registered for that activity in El Salvador. One possible reform would make external certification by an investment fund manager enough requirement to invest.
Carteras de inversión similares hacen que las diferencias de los rendimientos de los distintos planes de pensión complementaria sean mínimas.
Los rendimientos de los planes de pensión complementaria en Costa Rica muestran diferencias mínimas y están convergiendo en un rango de 4,29% y 5,25%.
“A enero pasado, la diferencia entre la operadora que pagó el rendimiento real anual más bajo (Vida Plena) y la que tuvo el más alto (CCSS OPC), fue menor a un punto porcentual”, reportó Nacion.com.