The Dominican Association of Pension Fund Administrators (ADAFP) reported that at the end of March the pension funds increased by RD$6,230.8 million due to the return on investments.
That, according to the ADAFP, confirmed that the reduction registered in February was a transitory phenomenon. Of the profits obtained in March, RD$2,596.8 million were the result of the revaluation of the portfolio invested in dollars due to the rise of 79 cents in the rate of said currency during the month, closing at RD$55.2046, which represents 41.7% of the increase of the fund, confirming the normalization of profitability, as has happened historically, and that when the rate of this currency rises, a favorable impact is reflected in the global results and of each affiliate. The ADAFP indicated that at the end of March, 24.0% of the pension funds were invested in dollars.
“As long as the dollar rate continues to recover its normal course, the value of that portion of the portfolio invested in dollars will also rise,” he said.
“It is important to note that pension funds are investment funds whose value fluctuates over time and that have historically recorded a positive return of 12.4%. Performance is measured in the long term as it is a retirement savings that is built over decades, “said the union.
At the end of March, the funds managed by the Crecer, Popular, Reservas, Romana and Siembra AFPs amounted to RD$757,052.0 million, for an increase of RD$8,979.8 million in relation to the previous month, an amount that includes the aforementioned profitability, as well as the contributions workers, of about RD$2,749.0 million in the month.
In addition, at the end of the same month, the portfolio invested in pesos managed by the ADAFP AFPs amounted to RD$576,324.6 million and investments in dollars reached US$3,291.6 million.
Last week, social security expert Diego Valero stated that the current system in the country has aspects to improve, but he would never agree to dismantle it, but rather to preserve it.
“You have to consolidate what is right and correct what is not right,” he said, in a conversation with elCaribe. He warned that any return to the past, such as the model of the old Dominican Social Security Institute (IDSS), could be detrimental.
He recalled that in that system perhaps 15% of the population had a pension and they were short. With the current one, about 50% will have a more worthy one.
The savings that the current system has generated, in almost 20 years, has sponsored 20% of the growth of the gross domestic product and has managed to lift almost 400 thousand people out of poverty, according to their calculations.
The institution is committed to retirement
The ADAFP is the business union entity that brings together and represents the Dominican AFPs, companies that are in charge of managing workers’ savings for their pensions. Its mission is to contribute to quality retirement for all workers, promoting best management practices, legal certainty and financial sustainability.