Five AFP earned more than RD$4. 0 billion “net” in 2013
SANTO DOMINGO. During 2013 the five pensions fund administrators that operate within the individual capitalization system obtained after-tax earnings of RD$4,255,883,825 (or RD$4.3 billion).
With respect to the earnings obtained in 2012, these numbers reflect a 13.1% increase.
These AFPs, which operate as managers in the system of individual capitalization are Popular, Reservas, Scotia-Crecer, Siembre and Romana.
Ninety-nine point five (99.5%) percent of these earnings are concentrated among the first four pension fund administrators, while the smallest, AFP Romana, barely obtained 0.5% of these earnings, which in their case, only grew by 1%.
The principle sources of income for the AFP are the commission of 0.5% on the contributable monthly salary, which is independent of the results of the investments, and the yearly complementary commission applied to the funds administered of up to 30% of the earning obtained above the interest rates of the certificates of deposits at the commercial banks.
For this second commission, as of 31 December2013, the AFPs had received RD$9.0 billion.
But this complementary commission of 30% was reduced to 25% according to the Superintendent of Pensions, Joaquin Geronimo.
“Regarding this issue we had some success during 2013 because we managed to reduce it, and it (the reduction) has been effect since 14 November of last year.
“The AFP can only collect a maximum of 25%,” he explained. This decision was taken as a reaction to the very high income which for this concept the pension fund administrators were accumulating during 2012 and 2013.
Geronimo revealed that at the present time “there is a consensus between SIPEN and the AFP that it would be convenient to modify the system of commissions in order to eliminate both the complementary commission of 30% as well as the 0.5% commission for administration.
According to the official, both premiums would be substituted by a single commission, “as occurs in the majority of countries where this system works.”
It would be a commission on the results. “The point of discussion” between SIPEN and the AFP is the percentage on the results, he noted.
Earnings of 4.43%
The real historical earnings of the pensions funds in 2013 reached 4.43% which means an increase of 50 basis points in relation to the performance registered in 2012 which was 3.93%.
This increase cuts the distance between the real performance of the pension funds and the goal that has been proposed by the Superintendent of Pensions and which is between 5% and 6% according to the director Joaquin Geronimo. In the meantime as the real performance goes up, so will the amount of the pension at retirement.
Category: DR News |