The Ministry of Economy and Public Finance has announced the nationalization of the country's private Pension Fund Administrators (AFPs).

The Bolivian pension system is composed of two AFPs, "Previsión", of the Spanish Banco Bilbao Vizcaya Argentaria (BBVA), and "Futuro", of Swiss Zurich Financial Services. Together, these two organizations controlled more than USD 2.2 billion in funds from over 1,200,000 contributors at the end of 2007. The government has held contracts with these entities since 1996 and according to Bolivian Vice President, Álvaro García Linera, owes approximately USD 3.2 million in debt to the AFPs.

Since 2006, a number of Bolivian sectors have been nationalized, including oil, mining, telecommunications, and electricity companies. In 2008, a law was passed allowing citizens to choose between private and public AFPs. Additionally, the constitution, approved in February 2009, called for State administration of pensions with control and participation of the people and stated that matters of public security cannot be privatized.

According to the Vice President, AFPs will be replaced by Public Treasuries for the collection of contributions and payment of retirement benefits. However, no date for the change to state management has been fixed and specific details of the nationalization have yet to be revealed.

Reference: ABC.ES, "Evo Morales nacionaliza el sistema de pensiones privado," 26 January 2010, http://www.abc.es/20100126/economia-economia/morales-nacionaliza-sistema-pensiones-20100126.html.

Cincodias.com, "Bolivia nacionalizará el sistema privado de pensiones," 26 January 2010, http://www.cincodias.com/articulo/empresas/Bolivia-nacionalizara-sistema-privado-pensiones/20100125cdscdsemp_26/cdsemp/.

Publication date: 26.01.2010