The 10th meeting of the Ministers of Finance of the Pacific Alliance (PA) was held on July 1, 2016, in Frutillar, Chile, within the framework of the 11th Presidential Summit of the Pacific Alliance. The Chilean Minister of Finance, Rodrigo Valdés, the Minister of Finance and Public Credit of Colombia, Mauricio Cárdenas; the Under-Secretary of Finance and Public Credit of Mexico, Fernando Aportela, and the Minister of Economy and Finance of Peru, Segura Alonso, attended the meeting.

The meeting also reviewed the progress and achievements of the technical groups derived from the agenda of the PA, set out in the Declaration of Paracas, in July 2015, and drew up an agenda to continue moving forward with concrete achievements.

Regarding the financial integration issues of the PA, the Ministers, among other things:

1.Acknowledged the significant progress made within their countries for ensuring the mutual recognition of issuers and the expansion of financial instruments and mechanisms of negotiation in the Latin American Integrated Market (MILA), and other platforms. The regulatory changes necessary for the recognition of primary public offerings of equities and fixed income instruments in the region, have been completed to date.

2.They valued the efforts made for the drafting an agreement for ratifying the tax treatment of income earned by the licensed pension funds in the PA countries when they invest in any other member country in the region.

3.They agreed to initiate assessments of the recognition of fund managers and their products in the countries of the region. They also called for evaluating mechanisms that would enable promoting the investments of the AFPs in the region.

Because of the importance that FIAP assigns to the integration of the PA countries, and the implications for workers’ pensions, the President of FIAP, Guillermo Arthur, attended the meeting of Ministers and held talks with the Ministers of Finance of Chile and Colombia, expressing his concern regarding the legislation recently passed in Peru, which allows the withdrawal of 95.5% of funds at retirement age, explaining the risks and damages entailed for the sustainability of the country’s pension system. He also pointed out that this measure makes it impossible to continue with the portability of pension funds between countries comprising the PA, since it would create perverse incentives, because the situation could be exploited by workers from other countries who could migrate their social security savings to Peru, in order to withdraw funds destined solely to financing pensions.

The 10th meeting of the Ministers of Finance of the Pacific Alliance (PA) was held on July 1, 2016, in Frutillar, Chile, within the framework of the 11th Presidential Summit of the Pacific Alliance. The Chilean Minister of Finance, Rodrigo Valdés, the Minister of Finance and Public Credit of Colombia, Mauricio Cárdenas; the Under-Secretary of Finance and Public Credit of Mexico, Fernando Aportela, and the Minister of Economy and Finance of Peru, Segura Alonso, attended the meeting.

The meeting also reviewed the progress and achievements of the technical groups derived from the agenda of the PA, set out in the Declaration of Paracas, in July 2015, and drew up an agenda to continue moving forward with concrete achievements.

Regarding the financial integration issues of the PA, the Ministers, among other things:

1.Acknowledged the significant progress made within their countries for ensuring the mutual recognition of issuers and the expansion of financial instruments and mechanisms of negotiation in the Latin American Integrated Market (MILA), and other platforms. The regulatory changes necessary for the recognition of primary public offerings of equities and fixed income instruments in the region, have been completed to date.

2.They valued the efforts made for the drafting an agreement for ratifying the tax treatment of income earned by the licensed pension funds in the PA countries when they invest in any other member country in the region.

3.They agreed to initiate assessments of the recognition of fund managers and their products in the countries of the region. They also called for evaluating mechanisms that would enable promoting the investments of the AFPs in the region.

Because of the importance that FIAP assigns to the integration of the PA countries, and the implications for workers’ pensions, the President of FIAP, Guillermo Arthur, attended the meeting of Ministers and held talks with the Ministers of Finance of Chile and Colombia, expressing his concern regarding the legislation recently passed in Peru, which allows the withdrawal of 95.5% of funds at retirement age, explaining the risks and damages entailed for the sustainability of the country’s pension system. He also pointed out that this measure makes it impossible to continue with the portability of pension funds between countries comprising the PA, since it would create perverse incentives, because the situation could be exploited by workers from other countries who could migrate their social security savings to Peru, in order to withdraw funds destined solely to financing pensions.