Pension Funds Suffer Major Losses, Yet AFPs Continue Collecting Fees: Fundación Sol Warns Impact on Upcoming Retirees

Original article: Los ahorros caen, las AFP siguen cobrando: Fundación Sol advierte impacto en quienes están por jubilarse

Significant losses in pension funds highlight a critical contradiction within the Chilean pension system: while workers’ savings are vulnerable to financial fluctuations, AFPs continue to charge fees for managing these resources. This scenario is particularly concerning for those who are weeks or months away from retirement.

According to Bloomberg reports, pension funds experienced losses of $7.7 billion linked to U.S. interest rates. Fund E, considered the most conservative option in the system, recorded a decline of 10.4% from January to September 2026, marking its second-worst historical performance.

Beyond the numbers, the primary concern lies in the implications for those reliant on their retirement savings to fund their retirement, especially individuals with limited time to recover from these losses.

APFs Continue Collecting Fees While Future Retirees Face Losses

In a conversation with Radio y Diario Universidad de Chile, Fundación Sol researcher Recaredo Gálvez warned that these losses “translate into a material problem for individuals planning their retirement in the upcoming months or even this month.”

This situation is particularly precarious because Fund E is the one that administrators recommend staying in for those nearing retirement.

The researcher explained that the erosion of savings can directly impact future pension calculations, especially for those who have accumulated lower amounts throughout their working life.

“This is especially concerning for those with a low accumulated fund or those nearing their retirement date, planning to opt for a life annuity, for instance,” he noted.

In other words, even the fund presented as the low-risk option is susceptible to losses capable of harming those who need to access their savings soon.

Savings Decline, Yet AFPs Continue Collecting Their Commissions

One of Fundación Sol’s main criticisms focuses on the risk distribution within the pension model.

While the fallout from poor investments affects the funds of contributors, administrators continue to charge fees for their services.

Gálvez questioned how, despite the deteriorating funds, “AFPs maintain their revenue safeguards through the commissions paid by affiliates.”

The critique points to a structural characteristic of the system: the revenue from commissions for administrators does not directly depend on the funds achieving positive returns.

Thus, AFPs continue to collect fees for managing resources, even when financial results negatively impact savings intended to fund pensions.

Fundación Sol Questions the Foundations of the Pension System

For Recaredo Gálvez, the losses are not merely a problem tied to a specific investment strategy but also highlight weaknesses in the individual capitalization model.

“This issue cannot be resolved merely with a generational fund scheme where money remains invested, nor was it resolved with the latest pension reform. The structural problem of the system lies in the very existence of AFPs and especially in individual accounts as a strategy for pension financing,” he explained.

The researcher also warned that geopolitical tensions and rising international financial uncertainty could exacerbate the exposure of retirement savings to further loss episodes.

Thus, the downturn of the funds reopens a discussion that extends far beyond investment outcomes: who bears the risks of the AFP system, and what real protection do people have when it comes time to retire.