Limitations of the minimum return guarantee for private pension funds in Colombia

Garantía de rentabilidad mínima

Authors

  • FLOR SALAZAR Universidad Nacional de Colombia

DOI:

https://doi.org/10.15665/dem.v19i3.2725

Keywords:

pensiones, capitalización individual, garantía rentabilidad mínima, fondos privados de pensiones.

Abstract

Performance is a fundamental factor in fully funded pension systems that determine not only the pension benefit but also the maintenance of the affiliates’ capital since the affiliates assume all market risks. Some systems involve certain guarantee mechanisms such as the minimum return guarantee in the investment of funds. This article analyzes the model
used by the supervisory and regulatory authorities of private pension funds in Colombia to determine compliance with the minimum profitability guarantee. Based on the analysis carried out, the limitations of this model to provide protection to the affiliates’ resources are shown. This is to the extent that the calculation model underestimates the minimum profitability required. Likewise, given the herd behavior that has characterized the profitability results of the funds, the way in which this mechanism has been formulated finds it difficult to guarantee adequate returns.

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Published

2021-10-18

How to Cite

SALAZAR, F. (2021). Limitations of the minimum return guarantee for private pension funds in Colombia: Garantía de rentabilidad mínima. Dimensión Empresarial, 19(3). https://doi.org/10.15665/dem.v19i3.2725

Issue

Section

RESEARCH RESULTS ARTICLES