AFAP SURA led the way in terms of profitability in 2018

AFAP SURA led the way in terms of profitability in 2018

AFAP SURA, a company who is committed to managing and growing its clients' savings, was the fund manager who most increased the retirement savings of its members in 2018, becoming a leader in profitability. 

Profitability in measured in Indexed Units (IU) earnings above inflation—and in Adjustable Units (AU)—earnings above average salary growth. That year, the savings managed by AFAP SURA produced positive returns in real terms for its affiliates, despite the fact that the context was one of negative returns worldwide. 
In this sense, according to data from the Central Bank of Uruguay, AFAP SURA achieved a 0.61% return in IU on average for the accumulation fund and the retirement fund, while the system as a whole closed at 0.11%. At the same time, it recorded a profit rate for its clients of 1.32% in AU compared to 0.81% of the system's average.

In nominal terms, the profitability of the accumulation fund averaged 13.95% in the last three years and 13.69% in five years. Meanwhile, the retirement fund produced an average profitability of 13.10% in three years and 14.29% in five years. These results also confirm AFAP SURA's leadership in profitability.  

It is important to note that the profitability achieved by AFAP is essential for the client when determining their retirement projections. For example, a 22-year-old affiliate who earns UYP 20,000 and is affiliated to AFAP SURA, if they retire at age 65, they would collect 95% of their salary thanks to the savings at both the AFAP and the Social Security Bank (BPS). 

If the worker were affiliated to a different AFAP, with the average profitability of the system that is lower than that of SURA, this rate would stand at 92%. In this example, the affiliate would collect about UYP 1,000 less on average. As the salary increases, the difference due to profitability also increases.

In addition, there is also an important difference between a 22-year-old who starts working and joins AFAP under Article 8 of Law 16.713 and someone who does not join. It regulates the way in which contributions are distributed and allows greater savings to be obtained through the individual capitalization system by transferring a greater part of the contributions to the Individual Savings Account at the AFAP. For example, in the case of a 25-year-old affiliate who earns UYP 25,000 per month, under Article 8, they would obtain a replacement rate of 91% when they retire at age 65 and 73% rate if they have not chosen this option.

The age of affiliation is also essential and affects future retirement. The difference between a person who decided to join at age 20 and another person who joined at age 25, for example, is significant. With a salary of UYP 25,000, the former would receive a replacement rate of 96% at the time of retirement, while in the latter 89%

*Replacement rates were calculated for a retirement age of 65. 
 These rates can vary significantly if the assumptions made by the calculation program used by AFAP SURA, which considers, among other things, retirement age, contribution amount, fund yields, etc., are not maintained.
The above information should be taken as an estimate, subject to possible changes considering each worker’s particular situation, and does not guarantee or project any profitability of the pension savings fund. 

About SURA Asset Management
 SURA Asset Management is a subsidiary company of GRUPO SURA expert in pensions, savings and investment funds. It is a Latin American organization with offices in Chile, Mexico, Colombia, Peru, 
El Salvador and Uruguay. As of September 2017, SURA Asset Management operates a total of USD 131.9 billion in assets under management for 19.1 million regional clients*.
* Clients and AUM include AFP Protección in Colombia and AFP Crecer in El Salvador. Even though these companies are not under direct control, SURA AM holds relevant stake.
SURA Asset Management Uruguay operates different business lines, among which are: AFAP SURA, the second largest retirement fund manager based on the number of affiliates and funds managed in Uruguay; AFISA SURA, an investment funds management company with open, public offer funds authorized by the Central Bank of Uruguay; and SURA Stockbrokers, which provides investment solutions that are customized to meet individual financial needs and goals, providing access to a wide variety of investment instruments.