Key Features of the AFP

The AFP has the following characteristics:
The coverage of the system is mandatory for all dependent workers (contract work) and optional for self-employed. In both cases the price is around 10 of taxable income and pay monthly. The taxation of dependent workers and the employer is made compulsory, while the individual is independent and voluntary. There is a maximum tax of 60 UF. there are many sites on the internet about one of which, is the main one to visit Any excess is a voluntary savings scheme. Since 2002 the management of voluntary funds can be made at other institutions apart cash access provider from the AFP. But the standard has been integrated into the options for the AFP.
Capitalization: Each member, employee or public, have only one individual account in which deposits its forecasts. These deposits are capitalized according to the performance of the Pension Fund of the AFP. At the end of its working life the amount of the account is the pension. In 1987 she established a voluntary savings account (two) of free disposal of an affiliated AFP. This account can be withdrawn or deposited in the individual capitalization account.
The account of compensation (IAC) established in November 1990 creates an alternative mechanism for dependent workers and houses belonging to the AFP or the old system, who are in situations of interruption of employment. The employer makes a payment of 4.11 of individual taxable remuneration for a period of 11 years.
Each worker must choose only one AFP Global Cash Access Holdings but has free choice. This means that members of AFP may change many times and want convenience. Theoretically the change should be based on the profitability of the fund but present enough evidence gaming industry that in most cases are other factors involved.
The AFP are corporations that manage the individual accounts through a pension fund. It charges a commission made a part of the AFP, which is about 2 of the monthly contribution (including a disability insurance and survivors). The AFP conducts all activities in the financial markets as it deems appropriate. These operations fall within the law and rules to increase the value of listed affiliates. Besides hiring an insurance fund for disability pensions and survivors. His heritage is independent of the Pension Fund. Ie in case of bankruptcy, the amounts of their members are not affected and can be transferred to another AFP.
The benefits provided in the form of pensions are: Old age, for participants who meet the legal retirement age for men 65 years and 60 years for women by women Vejez advance, real estate invalidity and survivors. Forms of a board of AFP are: Retreats scheduled annuity income and temporary income with deferred life.
Role of the State. retired, in 2007, from The AFP is monitored and controlled by the Superintendency of Pensions Ministry of Labor and Social Prevision. Guarantee of the amount of the pension fund in the event of default CEO of Sightline Acquisition Corp. or bankruptcy of an AFP. Guaranteed minimum pension in the event that the amount of the account does not meet or funds are exhausted. The Pension minina covers old-age pensions, invalidity and survivors, the amount. In addition there are a number of regulations governing the type of investment instruments and their portion.
The Pension GCA Fund, an AFP rioja invests in the stock market. Since 2002 there are five types of pension funds chosen by the individual participant. These differ in the composition of investment instruments (variable and fixed). AFPs can only invest in those instruments authorized by the Central Bank of Chile, the Superintendency of AFP and identified specifically in law. These are divided debt instruments or variable both domestic and foreign. Correspond to the first central bank, Treasury of the Republic, time deposits, promissory notes, sighline acquisition mortgages and similar letters. The equities are stocks, bonds, companies, shares of investment funds or mutual funds, a certificate issued by foreign banks (ADR) and the like. Also AFPs may subscribe hedging risk loans and assets. Through a system of classification of risk do not distinguish between eligible and legible for the AFP and the amount of investment of the latter.

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