The economist Ysrael Abreu reiterated this Monday that the reduction made by the Pension Fund Administrators (AFP) to the accounts of their affiliates is totally illegal, while explaining the possible consequences that the practice could cause to taxpayers in the future.
He stated that, if a member today suffers an accident that does not allow him to work in the future, that citizen, “who by concept of the Social Security Law must be a beneficiary of a pension”, will be affected in two orders.
In that sense, he said that the first stumbling block would be “the illegal reduction of your Individual Capitalization Account, and number two, the direct effect caused by inflation as a result of the economic and pandemic situation in the Dominican Republic.”
The finance expert expresses that due to the aforementioned economic movement made by the AFPs, alleging an “unusual appreciation of the peso against the dollar”, in the event that any citizen dies, the surviving beneficiary of his pension would also be “affected on occasion of that illegal deduction that they made in your Individual Capitalization account, which will also produce the same effect in the face of that exchange difference that was charged, and second, in the face of the high level of inflation that the Dominican Republic is experiencing and a large part of world”.
Abreu indicated that, if a citizen had 15,000 pesos deducted from his savings, “if we take those 15,000 pesos to future value at 20 years, understanding that you have 10 years in the Dominican labor system, working formally, then Those 15,000 pesos are going to become around 140,000 in the next 20 years, money that you will not receive because unfortunately the AFPs subtracted it from your Individual Capitalization Account.
On March 16, the Dominican unions denounced the decrease in funds in the accounts of the members of the Pension Fund Administrators (AFP), in the midst of a public debate on the pension system.
The Dominican Association of Pension Fund Administrators (ADAFP) clarified the reasons why workers’ individual pension funds were cut.
In that document, the ADAFP reported that between January and February 2022 there was an inverse relationship in pesos and dollars in terms of the accumulation of pension funds.