Slide1: Report on the Actual Situation of the Pension Funds in Venezuela
Madrid, April 12, 2000
Context: Context I.- Demographics and Macroeconomic Indicators
II.- Reforms to the Pension System
III.- Concerned Groups
IV.- Mercantil Financial Services (MSF)
Slide3: I.- Demographics and Macroeconomic Indicators
Slide4: Source: O.C.E.I., 12/31/99 I.- Demographics and Macroeconomic Indicators
Population 23,769,087
Active Population
10,206,259
Private 68%
Macroeconomic 1999
GNP(% Var) (7,2)
Inflation 20,0%
Loan Rate 27,8%
Saving Rate 15,7%
Monthly Salary (Average) 330 US$ Govt. 32% Men
64% Women
36% Average Age
26 yrs.
Slide5: II.- Reforms to the Pension System
Slide6: II.- Social Security Paying Members
2,118,008 Source: IVSS 12/31/99
Slide7: 1974 1999 % Paying Members vs. Occupied Population Number of Paying Members per Each Retired Source: IVSS, Ministry of Labor and Our Calculations The different variables, such as demography and a less dynamic and informal market, have coincided and created a major financial load on the actual paying members, generating an unviable and unsustainable system in time. 1974 1999 II.- Social Security
Slide8: Retirees of I.V.S.S. and Public Administration Population Over 60 yrs. old 964,000 persons without pensions Sources: IVSS, OCEI, Ministry of Labor, Our Research The volatility and the increase on Current Expenditure as well as the financing of other Social Security Benefits has caused a constant reduction on Pensions and lower coverages. Number of Persons 629,000 II.- Social Security
Net Government Expenditure as % of the GNP IVSS -Public Administration - Non Paying Members: Net Government Expenditure as % of the GNP IVSS -Public Administration - Non Paying Members % of GNP II.- Social Security Payments to Retirees, Non Paying Members Payments to Retirees, Public Administration Payments to Retirees, IVSS
Slide10: 2000 2010 2020 80+
70-79
60-69
50-59
40-49
30-39
20-29
10-19
0-9 80+
70-79
60-69
50-59
40-49
30-39
20-29
10-19
0-9 80+
70-79
60-69
50-59
40-49
30-39
20-29
10-19
0-9 Today we have a unique opportunity to come-up with “The Reform” due to the fact that the population pyramid is turning up side down. It will be more difficult to reform in the future. II.-Unique Opportunity Age Age Age % % %
Slide11: II.- Social Security
Background
Slide12: II.- Present Situation
Estimated date “Scenario 1” July - August
International bid
for the SEREISSI and Superintendency August
Superintendency
Start-up July
Law approval November-December
Authorization Prerequisites
for AFP January
Starting
Affiliation March
Starting dues 2000 2001
Slide13: Octuber
International bid
for the SEREISSI and Superintendency May
Starting
Affiliation November
Superintendency
Start-up September-October
Law approval 2000 2001 II.- Present Situation
Estimated date “Scenario 2” March
Authorization Prerequisites
for AFP August
Starting dues
II.- Characteristics of the Proposed System Systems: Mandatory
Contribution Mixed System Shared Government
Administration Private
Administration Accounts IntergenerationalSolidarity
In order to complement
the Minimal Pension
Capitalization
Individual
In order to pay:
Retirement Pension
Disability
Survivorship II.- Characteristics of the Proposed System Systems
Slide15: III.- Concerned Groups
Slide16: III.- Concerned Groups Mercantil Mercantil (Vzla)
Provincial Grupo BBV-Argentaria (Spain) -Polar (Vzla)
Banco Venezuela Grupo Santander (Spain)
Citibank Citibank (USA) - Banco Caracas (Vzla)
Banco Unión Grupo Unión (Vzla)
Banesco Banesco (Vzla)
Nuevo Mundo Grupo Pacific (Chile)
Adriática de Seguros Grupo Allianz (Germany)
Aporta AFP Aporta (Chile) - Seguros La Previsora (Vzla)
Seguros Sud América (1) Grupo Zurich
(1) Only as insurance provider to the pension system.
Slide17: IV.- Mercantil
Financial Services M.S.F.
Slide18: M S F Main Investment
Bank in the Country. Merinvest Banco Mercantil Storage Co.
Servibien
Mentrasa Universal Bank
Agencies Miami, New York and Curacao.
Pioneer and Leader in Trust Services,
Leader in Low Income Housing Law Loans
298 Agencies Early on 1998, 49.9% of the Insurance Company was sold to Ætna IV.- Mercantil Financial Services First Latin American Bank to obtain permit as a Commercial Bank in Switzerland. Mercantil has been present in Zurich , Switzerland for 12 years. U.S.Financial Institution. Specialized in Retail Banking, Mortgages and International Trade. Financial Institution specialized in International Trade, mainly bilateral between the two countries.
Slide19: IV.- Mercantil Financial Services
Contenido: Contenido Thank you