By Fiona Ortiz
BUENOS AIRES (Reuters) - The Latin America branch of life insurance company MetLife Inc. (MET.N: Quote, Profile, Research, Stock Buzz) will see regional growth this year despite a tough transition in Argentina to a reformed private pension system, a regional executive said on Thursday.
Eleven private pension funds operate in Argentina, where the industry was privatized in 1994, and they were hit by a surprise congressional reform in March, which will allow people to leave private plans and go to a state pension plan.
"This is a year of adjustment and work on retaining our affiliates (in Argentina)," said Oscar Schmidt, MetLife's Latin America head, talking to the Reuters Latin America Investment Summit in Buenos Aires.
MetLife is Argentina's No. 2 private pension fund company, managing some $5.3 billion in assets for 1.7 million affiliates. The Latin America branch of MetLife also owns Mexico's leading life insurance company, life insurance companies in Brazil and Uruguay and an annuities business in Chile.
"Evidently, the business is going to get smaller," in Argentina, said Schmidt.
Under the new law, beginning on April 12 the 11 million Argentines in private pension funds have 180 days to decide whether or not to move into a government pension system where they may make lower returns on their money, but have a guaranteed minimum pension.
The new law will also cut the commissions that private pension funds charge clients.
The Pension Fund Administrators Union industry group will spend money this year on publicity campaigns to keep affiliates said Schmidt, who is also president of the group. Continued...
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