Pension Fund Administrators reneged pact to cut fee: Top official

Santo Domingo.- Although the representatives of Dominican Republic’s Pension Fund Administrators (PFA) on August 14 agreed to cut the additional commission they charge to manage the resources from 30% to 25%, they’ve ye to fulfill that commitment.

Pension superintendent Joaquin Geronimo denounced the situation on Thursday, and said the agreement signed with the Dominican Pension Fund Association (ADAFP) "has failed."

"Despite all the efforts, unfortunately, the first stage of solving the problem of the PFA’s excessive profits has failed, without their compliance with the agreement to voluntarily and gradually reduce the additional commission from 25% this year and we propose 20% in 2014," the official said in a statement.

Geronimo said given the situation, the Pensions Superintendence will solve it by "unilaterally" reducing the PFA’s commission and "spur competition in the market."

"We have to act against the fact that the members’ low accumulative capacity to capitalize their individual accounts, together with the equally low contribution density, threatens the cherished goal of a decent pension for our workers," he said.

He noted however that amending the Social Security Act would be the "definitive solution to eliminate the fee.”