ISPs can issue certificates for AFP to obtain.
The Salvadoran Pension Institute (ISP) on Tuesday released public information on the amount of pension savings invested in transitional loan instruments (CFTs) under new terms and the issuance of new certificates of pension obligations (COPs) acquired by the El Salvador Pension Institute. denied. Pension Fund Administrator (AFP) since pension reform.
The ISP said the amount and terms of the CFT, as well as the date and amount of the new COP that AFP with the larger pension fund would acquire, “should be limited because they are closely related to the public interest.” There is,” he claimed. Right to temporary access to such information “in certain cases”.
The ISP doesn’t publish its confidentiality index, but it does cite Section 20 of the LAIP, which states that information classified as reserved pursuant to Section 19 “retains its character for up to seven years.”
In response to a report from a rating agency.
This request for information was made by Diario El Mundo on May 10, 2023, following the announcement by risk rating agencies Fitch and S&P Global Ratings, to assess the number of pension savings invested in pension investment securities (CIPs). Details of the terms were disclosed. It was converted to a means called CFT.
A report by S&P showed that 99% of the national debt to pension funds, or CFTs, is subject to a four-year grace period, with 7% of the debt being written off after waiting four years. Annual interest rate for 50 years.
Data released by Fitch Ratings show that workers who have invested in the state system have saved $8.4 million. New terms for these documents were proposed by the government and accepted by AFP on behalf of the workers.
He fears the debt with the COP will skyrocket.
Information on pension funds invested in the CFT or owed by the state was also requested by Patricio Pineda, president of the Table of Pensions with Dignity, but was denied in February.
Pineda said the reason for the reservations was fear of exposing “the truth about how the money was managed” by workers saved by AFP.
Representatives of the pension movement also said that since the Financial System Supervisory Service (SSF) had not announced anything related to the pension issue, new ISP-issued funds to be purchased by AFP with funds from the workers who contributed It claims that the amount of COP may soar. pension system.
The new Comprehensive Pensions Law, which was approved in 2022, states that “pension funds must obtain a COP” according to the ISP program, and pension funds are not required to have a risk rating, but rather an “ISP-issued COP”. You can invest unlimited in
Reform included conversion
Certificates in which AFP contributors’ savings were invested were converted under the new terms. ISPs can issue even more Social Security Obligation Certificates.
1.- Certificate replacement
The Salvadoran Pension Institute (ISP) had set a deadline of 120 days to exchange the Certificate of Pension Investment (CIP).
2.- What is CIP?
These were issued by the Pension Obligation Trust (FOP) to receive funds from AFP and pay pensions from the public scheme.
3.- NEW CONDITIONS FOR CERTIFICATES
New CFTs that become CIP are subject to new terms (interest rate, term, grace) defined by the ISP.
4.- Issuance by Rating Agencies
The conditions, announced by two rating agencies, are a grace period of four years, a period of 50 years, and an interest rate of 7%.
Source: Diario Elmundo