The Council for the Supervision of the Financial System (Conassif) has decided to postpone the transfer of ¢12.33 trillion in investments from Costa Rica's Mandatory Pension Regime (ROP) to generational funds, a decision officially announced on March 20. This delay affects six complementary pension operators, which had already made adjustments in preparation for the forthcoming changes.

Despite the setback, representatives of these operators expressed their respect for the council's decision.

According to data from the Superintendency of Pensions (Supen), the six pension operators held investments totaling ¢7.11 trillion in colones and ¢5.22 trillion in dollar-denominated assets as of February.

Roger Porras, manager of Popular Pensiones, the country's largest pension operator, indicated that in anticipation of the reform, they had maintained liquidity to balance out the differences between securities and the various fund assets.

Gregory Quirós, manager of Vida Plena, noted that they increased their liquidity and cash equivalents in both foreign currency and colones in expectation of the generational funds.

He added that they had acquired tailored instruments to meet the specific needs of the ROP reform since the second half of the previous year and continuously adjust tactically in response to regulatory changes.

Ana María Brenes, manager of Pensiones BAC, stated that their investment strategy adjustments for generational funds have been gradual and careful over the past months to mitigate potential impacts on members.

Furthermore, she mentioned that they had also planned for a possible postponement of the implementation, which ultimately occurred.

Brenes outlined that the adjustments made were suitable for both a scenario with fund segregation and the continuation of a single fund, adding that the current fund would not require significant further adjustments and would pursue an investment strategy aimed at maximizing benefits for members.

Rocío Aguilar, former head of Supen, warned that this decision could pose significant risks, as the investment portfolios had been aligned with a planned implementation date of April 1. She emphasized that a 12-month halt just days before the scheduled start could have operational repercussions for the pension operators.

Originally, the generational funds were slated to be implemented in April, with complementary pension operators expected to categorize clients by age group within 15 months, followed by an additional 18 months to execute the investment strategy for each fund.

Conassif justified the postponement by stating that it was necessary to conduct additional studies on replacement rates, investment limits, and the reform’s overall impact.

The council emphasized that the aims of the reform remain intact, with only its implementation timeline being revised.

Juan Antonio Vargas, a member of Conassif, cited pending technical studies essential for supporting the ROP reform as a reason for the delay, expressing that inadequate timing rendered proceeding with the original schedule irresponsible.

The resolution to delay was approved by a majority vote within Conassif, which was not unanimous, with five votes in favor and three against.

The decision stands firm following these discussions.

In a response to the delay, Quirós stated that while they were ready for the transition, the regulation also presents opportunities for improvement.

Marco Vargas, manager of BN Vital, emphasized a respectful adherence to Conassif’s decision and indicated that they are evaluating the necessary actions following the postponement.

Brenes affirmed that her team would remain attentive to the supervisory directives, while Porras underscored the importance of the reform to the pension system, highlighting the need for thorough examination of its implications and impacts.

Generational funds categorize members of pension operators by age group.

This strategy aims to diversify investments—both locally and internationally—according to these age categories, ultimately enhancing the complementary pensions received at retirement.

The approved framework divides members into four groups: Fund A for those born before 1970, Fund B for those born between 1970 and 1979, Fund C for individuals born from 1980 to 1989, and Fund D for those born from 1990 onwards.

Investment approaches vary, with more aggressive strategies introduced for younger workers, while those closer to retirement are aligned with conservative methods focused on fixed-rate instruments and domestic market issuances.

The ROP currently serves 3.16 million members, including 1.37 million contributors and 79,000 pensioners.