Members of four of the five pension fund administrators (AFP) that make up the adafp have seen their balances diminished by the appreciation of the Dominican peso against the dollar, due to the investments made by these companies under foreign currency.
affiliates of those AFPthe main ones of the system: Popular, Crecer, Siembra and Reservas, which between them added up to last February 4,222,024 people, equivalent to 97.6% of the total number of affiliates of the pension administrators, would be among those “momentarily harmed”, due to the exchange situation .
Kirsis Jáquez, president of the adafp (Dominican Association of Pension Fund Administrators), declared that the AFP associated with the guild are affected. However, until last January, the most recent data from the Superintendence of Pensions (sipen) show that the AFP Romana -one of its members- was the only one of the seven that make up the system that did not have investments in dollars.
Jáquez, in a conversation with journalists, stated that investments in dollars have been positive for members of the AFPensuring that they contribute to a sustained increase in their assets.
He reported that, as of December 31 of last year, approximately 24-25% of pension funds were invested in dollar-denominated instruments.
“As of December 31, we had saved 3,353.6 million dollars in dollars, with an exchange rate of 57.14, which represented 191,624.7 million pesos in pesos. Those same dollars, which are (in the system), due to the appreciation of the peso, which in February was 54.41, when converted to pesos would be 182,469.3 million. Its value in pesos fell,” he explained.
It is the second time that the revaluation of the peso causes a reduction in the balance of the individual capitalization accounts of the pension funds. The first time was in 2004, but it had less impact.
Investments by AFP
The sipen establishes that, as of January 31, 2021, the AFP Siembra was the one with the highest percentage of funds invested in dollars, with a 29.78% share of its investment portfolio, equivalent to RD$48,752.7 million.
This one was followed AFP Popular, that of its investment portfolio amounting to RD$265,914.3 million, 26.77%, equivalent to RD$71,188.4 million, were invested in dollars. AFP Reserves was listed as the third with the largest part of its investment portfolio in instruments in dollars, equivalent to RD$34,814.1 million, of a portfolio amounting to RD$132,295.3 million, for 26.32%.
Despite the impact of the appreciation of the peso on investments in dollars, Joel Santos, general manager of AFP Reserves, said that the situation, which he described as temporary, is the product of a wise decision to control other elements that affect the owners of the funds, such as inflation.
“We understand the reasons why the monetary authorities have made the decision to provoke the appreciation of the peso, given the global economic difficulties, and they are fighting against an important scourge, which is inflation, which could also have a negative impact on the funds,” Santos said.
The rest of the AFP: JMMB-BDI had 20.45% of its investments in dollars (RD$963.1 million); To grow, with 20.28%, equivalent to RD$37,141.4 million; and Atlántico, with 11.17%, representing RD$952.9 million.
