The General Manager of AFP Reservas and consultant in the social security system, Joel Santos, attributed the growth reflected in the amount of the individual accounts of AFP affiliates, at the end of March.
He stressed that the profitability achieved by pension fund administrators for the benefit of their members is one of the most important achievements in the component of the Dominican Social Security System.
Santos assured that more than 50 percent of the growth that these funds have historically had has been the result of the profitability generated through their investments.
He also underlined that during the past year more than 70% of the increase in those savings managed by the AFPs was due to the profitability obtained from the investment of the funds.
“So that means that the element of managing these funds, of achieving profitability, is something that the AFPs have known how to do and that is why people have noticed how their funds grow consecutively month after month,” said the business leader and social security consultant.
He also highlighted that in addition to the growth of these resources registered each month, AFP affiliates have at their disposal the mechanism through which they can consult their equity accounts and compare the closing of February and last March, where they will be able to appreciate a profit margin in relation to one month and another.
He argued that it is one of the most regulated systems there is “through monitoring, daily information that AFP members receive, members review their accounts every month or as many times as they consider each day, being able to verify that movement in their favor ».
He emphasized that those who manage these pension funds as managers do so in a transparent manner, and that the affiliate can verify this daily movement through their electronic equipment.
Due to the aforementioned, the specialist in social security issues rejected the questioning that some interested sectors have made to what happened with the reduction in the amount of the affiliate’s individual accounts reflected in February of this year, which was due to the appreciation of the Dominican peso against the dollar.
«The situation that arose was the following, it is known that there was a reduction in the balances expressed in pesos in the month of February, but we had said from the beginning that it was a conjunctural, momentary situation and we have clearly seen now after closing the month of March that this was reversed with a growth of these resources amounting to about 2,500 million pesos in favor of the affiliates, “said Joel Santos.
In that sense, he indicated that the positive result, without including the contributions made by affiliates of about 6.5 billion pesos, has to do with the traditional growth presented by administration profitability.
He said that there has also been a movement in the exchange rate in the opposite direction to what happened in February, that is, there has been a depreciation of the exchange rate that depreciated about 79 cents in the month of March that has contributed to about 2 1,500 million to that increase «So what we have is an improvement in the month between what is the traditional growth that the funds present by administration, that is, the positive return, added to that by the movement of the exchange rate , totaling about 6,500 million plus the normal contributions made by affiliates, “he added.
Regarding the questioning that was made of what happened in February, the businessman considers that they were unfounded and cheerful assessments coming from people who are unaware of how the pension system works.
Joel Santos recalled that the first thing to understand is that the AFPs cannot touch the members’ funds and that the members’ accounts are totally separate from management by the fund managers, because what these are doing is fiduciary management, an account of third party from which they cannot touch, nor put money or withdraw money.
However, Santos considered that the rest of the entities involved in the activity, is to introduce improvements to the Social Security system, especially in the line of pensions and health services.
He recalled that it is a law, 87-01, the approval and application of which dates back more than 20 years, which at that time was the best there was, but experience indicates that it should be reviewed, improving in some aspects.
“It is necessary to provide health services to pensioners of the system, make its administration more effective, so that the care and benefits to which members have access can be more automatic, and that is precisely why some aspects of that law must be reviewed, “he added.
He understands that it must also be established in the modification of the legislation that the heirs of the AFP member can be determined while the member is alive, as occurs with insurance companies.
He concluded that in this way the process of delivering the funds to the heirs, so that the process can be much more automatic than what we have today “that is, there are many aspects of that type, among them the Dominicans that have been proven have settled abroad, their savings are disbursed to them,” he said.
