Santo Domingo.- The Chamber of Deputies on Tuesday voted to amend Dominican Social Security System Law 87-01, that will reduce the annual fee charged by pension fund managers (AFP).
The vote comes in the heels of a complaint by a lawmaker that the pension fund managers have made an “abhorrent” RD$15.6 billion i(US$346.7 million) in just five years, a figure he affirms is behind workers’ dwindle retirement savings.
The initiative, approved by 122 of the deputies present, stipulates an annual fee for pension fund managers of up to 15% of the profits above the rate on CDs.
Chamber president Abel Martinez said lawmakers won’t delegate their responsibility to safeguard the interests of the majority. "Dominican Republic has the highest commission in the region, charging exorbitant amounts from workers’ savings for old age, thus reducing what they’ve accrued for retirement."
Martinez said the excessive profits of pension fund managers have been the source of scandal in all countries of the region, but noted that the issue has been corrected.
Deputy Ramon Cabrera, who drafted the bill, said Dominicans don’t know where the AFPs are taking the people with the lowest income.
He said the deputies forced the AFPs to drop commissions from 30% to 25%, but I still believes it’s too high, for which15% would be fair. "Those pension fund managers have made 15.6 billion pesos in five years. That’s something abhorrent because the more they pull out with those fees the lower the pensions will be."