October 22, 2008 / 3:45 PM / 9 years ago

FACTBOX: Argentina's private pension funds system

BUENOS AIRES (Reuters) - Argentine President Cristina Fernandez on Tuesday sent a bill to Congress to nationalize the country's private pension system.

Here are some facts about Argentina's Retirement and Pension Fund Administrators, known as AFJPs.

HISTORY - Argentina privatized its pension system in 1994 along with many other Latin American countries that did the same in the last two decades. The system was seen as an alternative to a long history of government financing raids on public pensions and low state pensions, widely seen as inadequate for retirees. But the AFJPs have been criticized for high commissions and lack of guarantees, and two years ago the government let savers return to the state system. More than a million people took up the offer.

MAJOR PLAYERS - There are 10 AFJPs, five control 81 percent of the funds in the system.

* Consolidar fund run by BBVA Banco Frances SA (FRA.BA), a unit of Spain's BBVA (BBVA.MC)

* Maxima fund at HSBC Holdings Plc (HSBA.L)

* Met AFJP, which is run by MetLife Inc (MET.N)

* Nacion AFJP at Argentina's Banco de la Nacion

* Origenes, owned by ING Groep NV ING.AS(ING.N)

FUNDS - In recent months the system took in some 1 billion pesos a month in contributions, amounting to some $4 billion a year. About 9.5 million Argentines have a private pension account, but only 3.6 million made contributions in August, or about 38 percent of people who have private pension accounts.

INVESTMENTS - As of September 30 the funds held 94 billion pesos ($29.5 billion) in assets, of which 55 percent is in Argentine government debt and 11 percent in Argentine stocks.

PERFORMANCE - On average the private pension system has gained 14 percent a year, a number that seems lofty in an international context, but Argentine inflation is high and the performance is based on the face value of bonds rather than their market value, which is much lower. In the 12 months ending in September the pension funds lost 2.25 percent on average, as Argentine stocks and bonds have declined sharply due to local political turmoil and the global financial crisis.

Compiled by Fiona Ortiz; Editing by Theodore d'Afflisio

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