The Pensions superintendent also pointed out that the pension reform has generated uncertainty in the market, which has discouraged the entry of new players into the AFP industry.
The current pension reform being discussed in Congress proposes to increase the coverage of the Solidarity Pillar, from 60% of the poorest population to 80%, leaving a balance of almost 2.5 million people with benefits.
In the midst of this discussion, the Superintendent of Pensions, Osvaldo Macías, pointed out that the country must move towards guaranteeing a minimum pension for 100% of the population.
“Chile should go to a universal basic pension, I have no doubt about that. It should, sooner or later – hopefully sooner rather than later – arrive at a universal basic pension. The step that is being taken now is gigantic. Going from 60% to 80% is an issue that until recently was unthinkable. Therefore, the answer to this is the government and the Ministry of Finance, who have to see the availability of fiscal resources, I do not have it, “the regulator said Wednesday at a seminar. online organized by Tanner Investments.
Disincentive for new players
Also today, the Superintendency of Pensions reported that it received offers from two AFPs for the bidding process for the portfolio of new affiliates. In that sense, Macías acknowledged that the pension reform generates uncertainty in the market, which has discouraged the entry of new players into the business of pension savings management.
“We know that it is a period of great uncertainty in the pension system, that there are changes in progress and without a doubt that this discourages new actors from appearing, until the rules of the game are completely clear. In this context, today AFP UNO, which is the cheapest, charges 0.69% of taxable income. For us it is good news that there are two applicants, because we make sure that the affiliates will be able to choose an AFP that will charge cheaper than what the administrator is charging today. In other words, there is going to be a commission of less than 0.69% and that is good news, “he said.
“The main thing is to clear up the uncertainty. Once the uncertainty in the pension system is cleared up, there will be more stakeholders interested in entering,” added the supervisor.
The pension project being processed by the Executive includes changes so that some cooperatives can manage pension funds, with the aim of increasing competitiveness in the industry. It also proposes adjustments to the bidding of new affiliates, passing the auction period from two to three years.
Concern for AFP UNO
Another issue that the regulator touched on was the call made by Felices y Forrados to switch to AFP UNO, since the manager could suffer an impact on its investment portfolio.
“AFP UNO’s investment portfolio is going to multiply. We estimate that the amount administered by UNO will be multiplied by five or six times, that is, it could go on to manage US $ 1.5 billion after the transfers. That does worry us, because it implies that the diversification of AFP UNO is going to be very complex to maintain, because a huge amount of resources that it has to manage come all at once, “he said.
That is why he pointed out that he has maintained constant contact with the management of the manager, in addition to the other AFPs, so that the funds of UNO affiliates do not have an impact with the transfers.
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