The Pension Fund Administrators (AFP) registered losses in the profitability of their accounts in the first four months of this year and it is estimated that there is a decrease of S/ 4,346 million, according to data from the Superintendence of Banking, Insurance and AFP ( SBS). Here we tell you all the details.
The figure is estimated taking into account that at the end of December 2021 the Private Pension System it had an amount of S/ 133,310 million, but in April it fell to S/ 128,964 million. A decline of 3.26%.
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Given this, thousands of users have reported losses in their pension funds, in some cases of up to more than S / 7,000.
Fund 1
According to data from the SBS, Fund 1 is the most affected in its profitability. Here are 4% of the members of the AFPthat is, 348,000 people who are close to retirement.
In detail, in December 2021 it registered an annual nominal return of -3.17%. In January of this year (-4.56%), February (-5.07%), March (-4.37%) and April (-4.60%). Meanwhile, the real profitability, the negative figure is two digits, with -11.64% to April.
Among the claims, a user claimed to have noticed a reduction of S / 7,000 from his account. From almost S/ 70,000 it went to S/ 63,000 between December and April, which represented around 10% of his total savings.
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Fund 2
Fund 2, whose risk level is moderate, has shown a slightly positive return with 0.59% as of April, according to the Superintendence of Banking and Insurance. This group is made up mostly of middle-aged people whose retirement date is far away and is the fund with the largest number of affiliates, with 91%, which is equivalent to 7.9 million citizens.
However, its real return is negative (-4.96%) and several affiliates have reported losses when reviewing their account statements.
Fund 3
Being the one with the highest risk, Fund 3 only houses 3% of members of the private pension system. The 261,000 members of this group know that the type of investment is 20% fixed income and 80% variable income.
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The SBS announced that for this fund the nominal and real returns are positive. However, there have also been cases of users with losses.
What is the reason for this loss in AFP funds?
César Romero, head of Research at Renta4 SAB, maintained that these losses in the AFP are related to the global economy.
“Because the profitability of the main markets is negative in the year, both fixed income and variable markets, due to the situation of rising rates and economic slowdown”, he pointed.
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In addition, given the various reactions that have arisen around the recent fall in the profitability of the investment funds that we manage, which corresponds to the fall in global markets, the AFP association made the following clarifications:
- Pension funds are by definition long-term investments: the objective is to see the fruits at the end of the member’s working life. Without the premise of the long term, it is not possible to assume the risks that actions entail in the short term, nor have the profits that they entail –and that in fact they have entailed for all affiliates with several years with us–.
- What is a film should not be seen as a photo. For example, in the international financial crisis of 2008, between January 1 and October 31, the pension fund it devalued by 24.27% and from November 1, 2008 to December 31, 2009 it recovered by 37.48%. Similarly, in the COVID-19 crisis, from January 1 to March 23, 2020, the fund was devalued by 15.61% and then from March 24, 2020 to December 31, 2021 it recovered by 37.37 %.
- In the long term, the funds of the AFP they are highly profitable for our affiliates, having produced an average annual return of 11.2% (that is, taking into account the bad years together with the good ones) in the 29 years that we have been in existence.
