Over 10 billion dollars lost on bets: Chile's pension savers demand answers from the AFPs

What happened

Superintendent Joaquín Cortez told the Labour Committee of the Chamber of Deputies on Monday that the five multifunds had lost about 7.7 billion dollars on interest-rate swaps with foreign banks through September; including domestic operations, the figure is 'somewhat more than 10 billion'. The regulator, he said, had warned the funds as early as 2024.

According to 24 Horas, the AFPs had bet on falling US interest rates. Instead, war and oil prices pushed up inflation and US Treasury yields. The hardest hit was Fund E, considered the safest, which lost about 10.4 percent in real terms between January and September.

Experts stress that these are valuation losses that could recover; so far in October the fund has gained slightly. But anyone signing a lifetime annuity now locks in the loss.

The mood on the ground

The Clinic described the committee session as a 'tough round'. Deputies from left to right asked about compensation for savers; Socialists said those who gamble away workers' savings belong in prison. A Republican deputy asked why all the funds made the same bet and what people who must retire now should do. The Chamber unanimously approved an investigative commission.

The head of the AFP association declined to discuss mistakes or compensation and pointed to a possible recovery in valuations – a stance that has fuelled rather than calmed the outrage.

Savers are increasingly turning to the courts: the first appeals filed in Santiago and Puerto Montt accuse two funds of breaching their fiduciary duty. Meanwhile, media guides try to calm nerves, advising against panic switching and suggesting that those who can afford it postpone retirement.

Voices from the media