Achievements and challenges of the Dominican pension system highlighted during congress in Colombia
Kirsis Jáquez participated in the 16th edition of the Asofondos Congress in Cartagena de Indias, Colombia, where she highlighted the achievements and impact of the Dominican Republic’s pension system on the country’s economy. Jáquez emphasized that the system has contributed to the liquidity of the financial system and the reduction of the rate spread, while playing a key role in the creation, development, and deepening of the stock market, with financing for important sectors such as tourism, free zones, agribusiness, and renewable energy generation.
However, Jáquez pointed out that the main objective of the pension system is to provide fair pensions for workers. She mentioned that the system needs to be reformed after almost 20 years to strengthen it and provide affiliates with more guarantees for a decent retirement in a sustainable way. This reform, according to Jáquez, must address structural issues, such as the high informality of the labor market, which results in low or non-existent pensions for many workers.
Jáquez suggested that the reform should focus on strengthening the contributory pillar through savings, while the most vulnerable segments of the population should be protected with targeted solidarity pensions financed through the public budget. She also emphasized the importance of strengthening pension education and communication with affiliates.
Jáquez participated in the panel “What lessons do the reform processes leave in the region?”, which was moderated by Daniel Wills, technical vice president of Asofondos. Other participants included Carlos Ramírez, consultant and former president of CONSAR of Mexico; Juan Hernández, director for Latin America of Vanguard in Mexico; and Natalia Gallardo, director of studies for AFP Cuprum in Chile. The Asofondos 2023 Congress also addressed topics such as the global macroeconomic situation, inflation and interest rates, and the design of pension systems in the world.
The pension system needs to be reformed to raise the value of payments to pensioners on the lower levels of earned income to help them cope with the rising costs of inflation. The Pension Fund Administrators of the RD administered about US$ 16.6 billion as of Nov 2021. There are more than enough funds to disperse to pensioners.