Pension fund profitability 4% in 1yr.

Uruguayan pension funds achieved an average profitability of 4% (in dollar terms) during the last twelve months (May to May), according to information from the central bank. The AFAPs have some 60% of their funds invested in government papers and the remainder in time deposits and corporate bonds. Due to the small size of the local stock market the AFAPs do not invest in shares, a central bank officer told BNamericas. The economic and financial crisis last year hit the AFAPs hard as the value of their government holdings dropped significantly. They also took a haircut when the government imposed a debt-swap earlier this year to improve its poor fiscal situation. However, the Uruguayan pension system is still an "immature" system and it will take between 15 to 20 years before a significant number of affiliates begin to claim their savings - and therefore there is real potential to recover the losses from the crisis and the debt-swap, the officer said. Uruguay has a mixed pension system in which the affiliates contribute both to the old state-run system and to a private system, which is composed of four fund managers (AFAPs): Union Capital, Republica, Afinidad, Integracion.