Peru's Fin Min Sets Up Group To Study Private Pension Funds

Peru's finance ministry has set up a working group to study and design a plan to widen coverage and increase efficiencies in the nation's private pension fund system.

The working group, which has four months to report back to the ministry, is made up of representatives from the finance ministry, the Central Reserve Bank of Peru, the Superintendent of Banking, Insurance and Pension Funds, Congress and some economists.

In a statement, the finance ministry said that although the private pension system, or AFP, has 4.8 million members, "the advances in terms of widening the number of persons with coverage have been modest."

It said that only 20% of the active working population regularly contributes to their private pension funds.

"It is necessary to improve the private pension funds, with reforms that permit a widening of coverage and an improvement in the competitiveness of the private pension system," the ministry said.

President Ollanta Humala's Gana Peru party criticized the AFPs during the election campaign this year, and at one point proposed setting up a new government-run pension system.

The AFPs that operate in Peru are: AFP Horizonte, owned mainly by Holding Continental and Spain's Banco Bilbao Vizcaya Argentaria (BBVA); AFP Integra, mainly owned by the ING Groep (ING); AFP ProFuturo, whose main shareholder is a unit of Bank of Nova Scotia (BNS), and AFP Prima, controlled by Peru's Credicorp Ltd. (BAP)

-By Robert Kozak, Dow Jones Newswires; 511-221-7050; [e-mail]