Given the complaint filed by the National Observatory for Consumer Protection in the sense that there has been a reduction in account statements of members of the Pension Fund Administrators (AFP), the Dominican Association of Pension Fund Administrators (Adafp) and the Superintendency of Pensions (Sipen) explained the cause of this decline.
The Adafp and the Sipen argued that the reduction that occurs in some account statements is the reflection of the conversion to pesos of the values invested in dollars, due to the reduction in the exchange rate.
The National Observatory for Consumer Protection had warned of the decrease in the figure reflected in “the member’s personal account.”
The entity gave the example of a member who had RD$3,304,998.51 and now has RD$3,299,874.19.
The Adafp explained that the investments of the pension funds of the workers affiliated with the AFP They are made in Dominican pesos and US dollars, which allows diversification by currency.
“Currently, 24.2% of the pension fund portfolio is invested in dollars, and by official provision the total of these investments in foreign currency must be expressed in pesos in the account statements of the members,” the association highlighted in several messages. on his Twitter account.
He argued that in recent weeks there has been an unusual revaluation of the Dominican peso against the dollar, which so far in 2022 already amounts to 4.8%, so “the reduction that occurs in some account statements is the reflection of the conversion to pesos of the values invested in dollars, due to the reduction in the exchange rate”.
At the close of March 7, 2022, the Central Bank exchange rate for the US dollar indicates that the purchase is located at RD$54.79 and the sale at RD$55.21.
In this regard, Sipen also explained in a statement that around 24% of the pension fund portfolio is invested in financial instruments denominated in dollars and, due to the appreciation of around 4.8% of the Dominican peso against the dollar experienced In recent months, investments are converted daily to Dominican pesos, so their value in pesos is lower.
It indicates that “currently, the prices of the instruments in which the pension funds are invested have fallen, resulting in a lower value of the investment portfolio and a decrease in the value of the fund’s share”.
“In this sense, upon receiving the statement of their individual capitalization account (CCI), members will be able to see that the balance in pesos (RD$) of their CCI may be lower in relation to the previous account statement. However, it should be noted that the individual capitalization accounts are expressed in quotas of the fund, so the number of quotas or participation that each affiliate has within the pension fund does not decrease, unless there is a request for a pension or transfer to another AFP”, he details.
However, Sipen considers that the decrease in the amount in its CCI is not a real loss of money, this being a usual situation typical of the financial markets and that it will be temporary “because the prices will return to normal and the quota value will reach to previous levels or will increase in greater proportion”.
