The regime of retirement by mandatory individual savings, which is in check by the plebiscite of the PIT-CNT to repeal the social security reform, It has a total of 631,272 Uruguayans that correspond to the Growth Subfund, 740,866 to the Accumulation Subfund and 216,160 to the Retirement Subfund, according to the latest data from the Central Bank of Uruguay (BCU).
Thus, between AFAP Republic (with 38.6% market share), AFAP Sura (22.9%), Union Capital AFAP (22.7%) and AFAP Integration (15.8%) received 14,027 million pesos in the fourth quarter of 2023 in contributions from the Social Security Bank (BPS).
Of the total, 56% went to República AFAP, 18% to Sura, 17.2% to Unión Capital and 12.8% to Integration. Meanwhile, the average monthly transfer per contributor was about 5,046 pesos.
AFAP investments
When evaluating what the AFAPs invest in, the BCU report highlights that the funds managed by affiliates amounted to 880,097 million pesos at the end of 2023, an increase of 4.7% in the last quarter. That figure is divided into 99,359 million of the Growth Subfund, 592,495 million of the Accumulation Subfund, and 188,243 million of the Retirement Subfund, with barely 2 million of Voluntary Savings Subfund.
Of the total managed funds, República AFAP concentrates 55.2%, with 485,586 million pesos, while AFAP Sura accumulates 18.1%, Unión Capital 16.8% and Integración 9.9%, with a average fund per member of 554,113 pesos.
When analyzing how the briefcase, 54.8% of Growth, 54.2% of Accumulation and 62.5% of Retirement was placed in State Securities and monetary regulation instruments issued by the BCU.
In this context, investments in adjustable global bonds, which concentrated 28.4%, as well as the Treasury Notes in UI and UP, which accumulated 17.8% in the Growth Subfund.
Meanwhile, global indexable bonds (28.6%), Treasury Notes in UI and UP (17.7%) and Monetary Regulation Bills in pesos (4.1%) stood out in the Accumulation Subfund, while in the Retirement Subfund there was a large participation of Monetary Regulation Bills in pesos and Treasury Notes in UI, which represent 29% and 25.5% , respectively.
What was the profitability?
Finally, the monetary authority’s survey specified that the gross profitability annual real in UR, which is calculated as an average of the last five years, stood at 2.3% in December 2023 for the Growth Subfund and the Accumulation Subfund, while it was 1.9% for the Subfund of Retirement.
At the level of each institution, the real gross profitability in UR was the following, according to the subfund: AFAP Sura (2.4%, 2.4% and 1.6%); AFA Integration (1.8%, 1.8% and 1.4%), AFAP Republic (2.4%, 2.4% and 2%); and Unión Capital AFAP (2.2%, 2.2% and 2.1%).
Refering to net real profitability projected annual calculated based on the gross profitability of the last five years, the total pension savings fund managed by República AFAP presents the best performance of the four as of December 2023, with a return of 2.1% in the Growth and Accumulation Subfund and 1.8% in the Growth Subfund.
Source: Ambito
