The Superintendencia de Pensiones presented a proposal to replace the multifunds system with generational funds based on contributors' age. The change is part of the pension reform and aims to improve risk allocation over the life cycle.
The proposal contemplates the creation of 10 generational funds. Younger affiliates will be assigned to funds with greater risk exposure, while those over 75 will go to a more conservative consolidation fund. Those between 35 and 75 will be divided into five-year cohorts.
The Superintendencia de Pensiones explained that “afiliados más jóvenes pueden soportar más riesgo, porque cuentan con más tiempo para recuperarse en caso de sobrevenir una crisis en los mercados financieros”. In contrast, “en el caso de las personas cercanas a la edad de retiro, la misma crisis puede afectar significativamente sus pensiones”.
The regime includes reference portfolios for each cohort and simplifies investment limits. Pension fund administrators will define their strategic allocation and may receive performance-based compensation.
The public consultation receives comments until July 31. Maximum implementation is set for September 1 this year and the transition from the current system will occur in April 2027.
