AFP: Opening the black box

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frozen-north
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AFP: Opening the black box

Post by frozen-north » Thu Sep 06, 2018 4:16 pm


Superintendencia de Pensiones vs ciudadano Rodríguez: la batalla por abrir la caja negra de las AFP

Hoy, mientras Sebastián Piñera prepara el envío del proyecto de ley que propone elevar las cotizaciones, obligar a los independientes a imponer y negar la posibilidad de cualquier forma de solidaridad al interior del sistema, la entidad que debe fiscalizar a las AFP se niega rotundamente a abrir la caja negra que registra el uso, en tiempo real, de los fondos previsionales.

Respecto de los costos que implicó la tramitación del reclamo, el fiscal afirmó que fueron apenas 200 mil pesos por el pago al receptor judicial por 8 notificaciones realizadas, sin ahondar en el valor de las horas/hombre que han dedicado en todo este tiempo los distintos funcionarios de la SP para negarse a entregar la información, beneficiando en última instancia a las AFP, las que según se sabe, recibirán otro 4% de cotización de los chilenos y chilenas en los próximos años si se cumple el anuncio del gobierno de Piñera de concentrar las cotizaciones adicionales solo en las AFP y no en un fondo solidario como planteaba el fenecido proyecto de ley de Bachelet. Del cobro de las comisiones fantasmas, nada se ha dicho en las propuestas presentadas por Piñera.


http://www.theclinic.cl/2018/09/03/supe ... e-las-afp/

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Re: AFP: Opening the black box

Post by admin » Thu Sep 06, 2018 8:23 pm

I just view AFP as just another tax.

Anyone depending on a goverment managed investment program for their retirment, has a very shocking suprise coming.

Their returns are crap. What was it last year for the highest risk best performing fund like 4 or 5% or something, and the others were flat to negative.

They almost manged to to stay ahead of inflation (which was some of lowest in chilean history), while my private investment portfolio manged over 30% in one of the greatest stock market rallies in chilean history, and also globaly. In other words a monkey (me) with a dart board could have done better.

I believe it is also one of the reasons that foreigners are always asking if chile is in a real estate bubble. Chileans, rich, poor, educated, uneducated, prefer to invest in real estate. So far, that very well might be the best alternative investment out there (for anyone).

Low taxes, stable returns, low risk, normally beats not only inflation but stays ahed of the UF. Most importantly easy for people to understand.
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Re: AFP: Opening the black box

Post by admin » Thu Sep 06, 2018 8:37 pm

Well on fariness to the afp system, it has another use. It keeps the country's economy very stable.

While jp moron and moron stanly are screeming that chile has too much debt and will be the next argentina, they are not accounting for the 100's of billions in private capital that is under writing the economy via afp system, because no other country realy has a compariable system.

I at least expect to see something back, and at the least dont have to pay in to the u.s. gov black hole (rather than black box). For me it is like finding an extra 12.5% to invest.
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Re: AFP: Opening the black box

Post by frozen-north » Thu Sep 06, 2018 9:42 pm

admin wrote:
Anyone depending on a goverment managed investment program for their retirment, has a very shocking suprise coming.

.. my private investment portfolio manged over 30% in one of the greatest stock market rallies in chilean history,...
It would be wonderful if everybody had your economic situation, but that is not the case. Many people don't have anything else when they get to their old age.

And the AFP is *not* government managed. It is a private system.
Las administradoras de fondos de pensiones (AFP) de Chile son instituciones financieras privadas encargadas de administrar los fondos de cuentas individuales de ahorros para pensiones.

https://es.wikipedia.org/wiki/Administr ... s_de_Chile
The pension system was changed by José Piñera, during Augusto Pinochet's dictatorship, on November 4, 1980 from a PAYGO-system to a fully funded capitalization system run by private sector pension funds

https://en.wikipedia.org/wiki/Pensions_in_Chile

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Re: AFP: Opening the black box

Post by admin » Fri Sep 07, 2018 8:50 am

it is goverment managed, just less managed than most. The goverment makes the rules and mandates the payment in to it. That is pretty goverment managed.

Still i would prefer to see a much lower cost, more 401k like, system. I as yet to encounter a broker in chile that could find their rear, let alone a good investment.

Also if i could get similar tax benfits, i would match funds for my employees retirment accounts above the require contribition. i am sure a lot of employers would jump on that.

It would be better to have a mandatory investment fund alternative, with some basic gaurd rails or default investment profile. There should be something as simple as a vanguarde type none-profit that reduces the fees for all account holders and offers etf or mutual funds with fees in the 0.03 range for things like basic market index funds. A fund with a couple hundred billion dollars in it, should be able to reduce some costs and get some economies of scale for everyone.

For example, The ipsa index fund last year made 33%. How the hell did the morons at the afp not at least match that? That was litterly the dumb money last year.

We know how to do these type of systems / investment funds, why the hell are we messing around with all these crappy over priced funds. Hell, computers can manage the hole system now. Fire all those useless brokers.
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Re: AFP: Opening the black box

Post by admin » Fri Sep 07, 2018 9:00 am

The other thing is that a 401k type system, that was mandatory to contribute, could be bolted on top the current afp system without causing any disruptions as might be the case if a afp reform was done. If it works well, then later look at phasing out the afp system.
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Re: AFP: Opening the black box

Post by admin » Fri Sep 07, 2018 9:24 am

You know probably the number one thing that would help both the retirment problem and the economy overall: basic financial education for everyone.

The poor get screwed, because they are forced to play a game they were never told the rules to. This not just chile problem.

It is like we all sat down to say play monopoly, or any other board game, and only one out four players knows the rules, but refuses to tell the other players how to play the game. Instead the other players have to figure it out on their own. Some do, some dont; but in the meantime the one player that knows the game can litterly run the board because the other players dont know they are breaking the rules or cheating.

What happens? The other players get frustrated and refuse to play. Which, at that point, you no longer have a functioning game. That is not good for anyone.

If the global sysyem is going to be run on "free markets", regardless if you like that or not, it assumes everyone at least should understand the game they are forced to play.
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Re: AFP: Opening the black box

Post by eeuunikkeiexpat » Fri Sep 07, 2018 11:42 am

The information is out there available to anyone with a device with a web browser. It's more like people prefer to be ignorant and then bitch and complain and join SJW flakery and support reactionary populist left or right movements. Anyhow, who would do the teaching, the authorities (that would turn into a joke and the joke would be again on the people)?
Generally, just a SPAM KILLER. You are on your own in this forum. My personal mission here is done.

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Re: AFP: Opening the black box

Post by Space Cat » Fri Sep 07, 2018 12:25 pm

eeuunikkeiexpat wrote:
Fri Sep 07, 2018 11:42 am
The information is out there available to anyone with a device with a web browser. It's more like people prefer to be ignorant and then bitch and complain and join SJW flakery and support reactionary populist left or right movements. Anyhow, who would do the teaching, the authorities (that would turn into a joke and the joke would be again on the people)?
Last year I’ve spent two weeks for the full time research of our investment plans. And I consider my research skills significantly above average. Now add the lack of good information about this in Spanish and the task is close to impossible for an average citizen.

To prevent populism, we need a decent financial education because otherwise the majority won’t figure it on its own.

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Re: AFP: Opening the black box

Post by eeuunikkeiexpat » Fri Sep 07, 2018 12:36 pm

Of course any education curriculum will in the end be absolutely politicized and thus useless and we are back to square 1.

But I hear you. My stepdaughter asked me for "investment" advice the other day and I probably hurt her brain with my explanations especially the fact that "investment" can be more than stocks, TINSTAAFL, risk/reward.
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Re: AFP: Opening the black box

Post by frozen-north » Fri Sep 07, 2018 3:47 pm

admin wrote:
it is goverment managed, just less managed than most. The goverment makes the rules and mandates the payment in to it. That is pretty goverment managed.
I believe that the correct term is *regulated*, not 'managed'. The AFPs operate within regulations created by the government; just like many other industries and businesses. Not too different than the way that governments create rules that say how many insect parts or maggots are allowed in your food:
Rodent hairs and bugs: The acceptable amount of grime allowed in your food in Canada

For example, 10 fly eggs or two maggots are acceptable in a 500 gram can of tomatoes.

https://globalnews.ca/news/3776104/inse ... od-canada/
For example, The ipsa index fund last year made 33%. How the hell did the morons at the afp not at least match that? That was litterly the dumb money last year.

For example, The ipsa index fund last year made 33%. How the hell did the morons at the afp not at least match that? That was litterly the dumb money last year.

We know how to do these type of systems / investment funds, why the hell are we messing around with all these crappy over priced funds. Hell, computers can manage the hole system now. Fire all those useless brokers.
The AFP system was not created to help the poor. Its intention was to create a capital that could be used for investments. And if the AFPs can make plenty of money for themselves with the way they are operating now, they have no reason to change anything. This is part of the problem that the lawsuit mentioned in the article I quoted at the beginning of this thread is trying to address.
The other thing is that a 401k type system, that was mandatory to contribute, ...
I am not familiar with the 401(k) system, but looking at the Wikipedia page it says:
In the early 1970s a group of high-earning individuals from Kodak approached Congress to allow a part of their salary to be invested in the stock market and thus be exempt from income taxes.
https://en.wikipedia.org/wiki/401%28k%29
I don't know how well it works now, but from that description it looks as a system that originally was created to help the wealthy to avoid paying taxes, not as a system to help the poor save for their old age.
The poor get screwed, because they are forced to play a game they were never told the rules to. This not just chile problem.
And from the article on the lawsuit, it seems that some of the information has been kept secret.

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Re: AFP: Opening the black box

Post by frozen-north » Fri Sep 07, 2018 3:53 pm

Space Cat wrote:
Last year I’ve spent two weeks for the full time research of our investment plans. And I consider my research skills significantly above average. Now add the lack of good information about this in Spanish and the task is close to impossible for an average citizen.

To prevent populism, we need a decent financial education because otherwise the majority won’t figure it on its own.
The reason to put regulations is that not everybody can be expected to become experts in a number of fields. And in addition one would have to spend time and effort in staying up to date with any changes.

This morning I heard a comment in the radio saying that Europe has become the region with most distrust of vaccination, and that is leading to high rates of measles. Well educated people can also hold very weird ideas.

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