RIO DE JANEIRO, BRAZIL – Workers’ savings in their pension funds reached a new high at the end of July, consolidating the good performance they have experienced following the recovery of the global economy.
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According to the balance sheet of Asofondos, the association of Colfondos, Porvenir, Protección, and Skandia, pension funds in Colombia accumulated a total of 333.8 trillion pesos (around US$89.6 billion) in savings in July, generating 88.8 trillion pesos in the last five years and 11.9 trillion pesos between January and July of this year.
“Once again, there is good news for the 17.5 million members whose savings are in the hands of the pension fund management companies, which even in difficult times have protected these funds and even generated significant returns for workers,” said Santiago Montenegro Trujillo.
According to the executive director, the current and long-term results confirm the importance of diversification strategies in investments, especially in times like these, since AFPs use this to buy assets at very favorable prices while generating significant profits by investing in other assets the rise.
According to the Focus on Pension Markets – 2020 report, Colombia has the highest returns in the OECD. The report, which provides an overview of pension savings in the organization’s 38 member countries and 52 non-member countries, highlights that “three Latin American countries have registered the highest average real annual returns over the last 15 years: Colombia (6.2%), the Dominican Republic (6.8%) and Uruguay (5.2%).”
Colombia’s return was the highest among OECD member countries, as the Dominican Republic is not a member of the OECD. In addition, the report emphasizes the importance of long-term returns, saying, “Long-term returns are more important than annual returns. Retirement savings is a long-term thing.”
Looking not at the last 15 years but the maximum possible period, Colombian fund returns rise to 6.7% and remain the highest within the OECD measure and the second-highest among the countries covered by the study, surpassed only by the Dominican Republic (6.8%).