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On the performance of the private pensions system in Colombia, Individual Savings Regime with Solidarity - RAIs (per its acronym in Spanish), the results are often highlighted in terms of profitability; a thesis upheld by the fund Managers industry. In order to evaluate how significant the real returns generated by this scheme have actually been, from a database of daily transactions by the pension funds from 1995 to December 2016, and using the methodology established by the Superintendencia Financiera de Colombia (SFC-Financial Superintendence of Colombia) for the calculation of returns, was determined the net return on explicit administration costs to be borne by the members and inflation adjustment. Such endeavor found that for the moderate, fund since they began operating, their actual profitability from the perspective of their affiliates has been close to zero, as has been the trend for conservative and higher risk funds, which in recent years tended to become negative. Based on these results, we discuss the benefits that are usually attributed to individual capitalization systems in terms of high returns, better pensions, and savings protection, which contrast with the low pensions, or impossibility attaining one, that is starting to become evident in private pension funds in Colombia.

Flor Esther Salazar Guatibonza, Universidad Nacional de Colombia

Professor, Faculty of Economics, Universidad Nacional de Colombia, Bogotá Colombia. Public accountant, Master in Economics, PhD student in Economics, Universidad Nacional de Colombia. ORCID ID:

Salazar Guatibonza, F. E. (2019). Real Returns of Private Pension Funds in Colombia. Cuadernos De Administración, 35(63), 70–88.


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