LIMA Dec 27 Peru's four main pension funds
trimmed their fees on Thursday but not enough to match a
competitor from Chile that shook up the local industry last week
with rock-bottom prices that may lure away clients.
The drop in fees in Peru's 20-year old private pension
system are a victory for President Ollanta Humala, who pushed
reforms through Congress six months ago aimed at lowering costs
to broaden coverage.
The funds, which manage some $30 billion in assets, had long
been criticized for charging high fees and only covering 5
million people, about one-third of Peruvian workers.
Under the new rules, companies must periodically compete for
new members by participating in auctions to see who can offer
the lowest commissions.
On Friday, Habitat, a unit of Chile's Inversiones La
Construccion, won the exclusive right to enroll an
estimated 700,000 new customers over the next two years by
offering to charge workers about 70 percent less than the
The sharply lower fees easily surpassed the government goal
of lowering fees by 30 percent over several years.
The pension funds that have dominated the market until now,
mostly linked to local banks, have reduced their fees by an
average of 11 percent since Humala overcame political opposition
to revamp the system in July, official data showed.
After last week's auction, Humala said Peru's pension funds
must "wake up" and start lowering fees. But none of the firms -
known as Horizonte, Prima, Integra and Profuturo - came close
to offering overall commissions competitive with Habitat on
The average new fees the firms introduced after losing the
auction are 1.55 percent of monthly salaries, or 1.43 percent of
account balances. That compared with Habitat's commissions of
0.47 percent and 1.25 percent, respectively.