The Pension funds of the Dominican Republic lead in contribution to the Gross Domestic Product (GDP) among Latin American countries, according to data offered by the president of the International Federation of Pension Fund Administrators (FIAP), Guillermo Arthur Errazuriz.
He pointed out that in Latin American countries the contribution to GDP of pension funds is between six percent and one 22% GDP growthwhich places the Dominican Republic as the country with the greatest contribution, since the book “Prosperity and Pensions” recently published by the Dominican Administrator of Pension Funds (ADAFP) indicates that the individually funded pension system managed by the AFPs has allowed the Dominican Republic to obtain 22% growth of the accumulated Gross Domestic Product (GDP) between 2003 and 2019.
Errazuriz warns that going back to the distribution model is unsustainable. In the same way, he said he, he has demonstrated his contribution to the deepening of the capital markets.
Arthur Errazuriz offered these statements during the inauguration of the FIAP Asofunds International Congress 2022which takes place until tomorrow in the city of Cartagena de Indias, Colombia.
The event will feature the participation of the President of Colombia, Ivan Duke Marquezas well as the candidates for the presidency of that country and leading experts and personalities in matters of pensions, savings, financial markets and macroeconomic situation.
The president of FIAP at the event said that the increase in life expectancies and the high rates of informality that prevail in the region (which exceeds 56%), have led to the unanimity of the experts recommending an increase in savings, through an increase in contribution rate and an incentive for voluntary savings.
Opposed to early withdrawals
The president of FIAP explained that in Chile and Peru they have decided to allow dissavings through successive early withdrawals of funds for purposes other than financing pensions, causing inflation, a significant reduction in amount of pensions.
He said that FIAP has called on congressmen not to get carried away by the understandable popular support that these initiatives may receive and assess the long-term damage.