According to the Financial System Report corresponding to the first quarter of 2023 prepared by the Superintendency of Financial Services (SSF) of the Central Bank of Uruguay (BCU)the Pension Savings Fund Administrators (AFAP) accumulate funds equivalent to 27.1% of the Gross Domestic Product (GDP).
The pension savings system in Uruguay accumulates funds for 809,472 million pesosreaching up to 1,552,968 members to the month of March of the current year. The total value of the Pension Savings Fund (FAP) 55.1% is administered by República AFAP.
In turn, the ranking follows AFAP Surah with 18.2%; Union Capital AFAP with 16.9%; and AFAP integration with the remaining 9.8%.
On the other hand, the monthly nominal yield of the sub-funds recovered from August 2022, after having felt the impact of the rise in interest rates by the BCU.
As of March of this year, the annual real gross profitability in Resettable Units (UR) for the next 36 months was in the order of 1.19% for the system average (with 1.17% from the accumulation subfund and 1.23% from the retirement subfund).
How do AFAPs invest?
The AFAP mechanism consists of investing the contributions of the workers and pouring the profits obtained into their individual savings accounts for the moment in which they finalize the retirement of their professional life.
The limits on AFAP investments are regulated by the Law 16,713which seeks that companies manage them with the maximum guarantees and minimize risksin turn, are controlled by the BCU.
Among the AFAPs already mentioned, the Accumulation sub-fund reaches more than 650 million pesos; Meanwhile he Retirement sub-fundthe best 160 million pesos.
For example, investments in debt instruments issued by the government and the BCUthe segment with the highest proportion in the AFAP portfolios, can represent a maximum of 75% of the total of the Accumulation subfund and 90% of the Retirement subfund.
Source: Ambito
