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FIAP > Boletín – Otras Publicaciones > Changes in the pension funds market in Uruguay: Where it is headed and what can be done? – National Association of AFAPs (ANAFAP, Uruguay) – April 2015
27 April, 2016

Changes in the pension funds market in Uruguay: Where it is headed and what can be done? – National Association of AFAPs (ANAFAP, Uruguay) – April 2015

This report analyzes the impact of Article 16 of Law 19.162 (in effect since February 2014) on the pensions market in Uruguay.

It presents evidence that the existing rules and regulations – which state that the assignment of individuals forced to participate in the Individually Funded System to an AFAP without being able to choose (default assignment), is based on the lowest fee charged by the Pension Fund Managers – generate a strong trend towards the concentration of the market.

The report concludes that if default assignment were to depend on higher net returns – including the management commission, the collective insurance premium and the custody commission, but adding as a relevant variable the returns obtained from the management of the funds— the process of concentration could be slowed down and, most importantly, there would be significant gain for members, since the amount accumulated in their savings funds would increase.

To review the full report, please download it below (only the Spanish version) here.

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