Pensions: Life-Cycle Model

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"Individual capitalization systems arrived in Latin America 28 years ago, looking to replace generic systems. These systems are now considering what their next evolutionary step is. Some progress has been seen in Chile and Peru, were multiple pension plans are available for workers.
Individual capitalization systems won't be capable of assuring an adequate retirement, so there is a need to migrate to the life-cycle portfolios model".

An article in Capitales.com lists the main considerations of this model by World Bank expert Heinz Rudolph.

Source: Capitales.com

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Panama Awards Administration of State Pension Investments

January 2012

The companies Consorcio Aliado and Progreso have been awarded the tender to manage for 5 years investments for the Capital Savings and Pensions of Public Employees (SIACAP in Spanish).

The contract was disputed with the consortium Multibank / Multisecurities and HSBC.


"Progreso has already administered this system in which about 72 thousand employees are affiliated and which has assets of $630 million.

Changes to Pension Operators Costa Rica

December 2011

The Superintendency of Pensions is studying changing the rules for the transfer of members between companies, to reduce administrative costs.

The rate of transfer of members between pension operators (OPC) in Costa Rica is the highest in Latin America. In Mexico, Chile, Peru, Panama and Uruguay, the rate is less than 6%, while in Costa Rica it is 12%.

El Salvador: Profitability of pension funds drops to 3%

January 2009

The profitability of the Pensions Savings System (SAP) dropped from 6.33% to 3.14%.

Elsalvador.com reports: "There is no need to use a magnifying glass to look for the reasons. They are very clear, according to the superintendent of pensions, Victor Ramirez, and the director investments at the Crecer Pension Fund Administrator (AFP), Carlo Escalante.

New Proposal for Improving Pension Collections

April 2012

The Salvadoran Association of Pension Fund Administrators has presented proposals to increase collection and maximize pension returns.

Among other proposals, there is a suggestion to rise the interest rate paid by the Government for the certificates that are purchased, in an obligatory fashion, using pension savings, going from an average rate of 1.49% to 4% or more.