"When a director is missing, he responds with the patrimony": Quiroz supports a lawsuit against the AFP for fund E

Chile's Minister of Finance, Jorge Quiroz, has expressed full support for the Superintendencia de Pensiones (SP) launching a disciplinary process against seven administrative pension fund providers (AFP) over their potential role in the losses suffered by the more conservative funds, particularly Fund E. According to the minister, the investigation aims to determine whether the AFP directors failed in their duty of care and diligence regarding these funds. The SP initiated the process after the value of Fund E, considered one of the most conservative in the system, fell by 10.39% through September. This decline followed controversial investment decisions made by the AFPs involving U.S. interest rates, which led to massive financial losses. Quiroz emphasized that the government had been analyzing investigative measures since the controversy emerged. He stated that the SP’s investigation would assess whether the losses were due to inherent risks in fund management or resulted from negligence, recklessness, or other misconduct by the AFPs. Quiroz noted that the law stipulates that if an AFP director fails in their duty of care, they could face personal liability, potentially requiring them to compensate with their own assets. While he did not anticipate specific sanctions, he reiterated his backing for the SP's actions, stating that the findings will dictate further steps. The SP's current superintendent, Joaquín Cortez, took office in March and quickly imposed restrictions on high-risk investments by AFPs, aiming to reduce volatility and prevent additional losses. Quiroz credited Cortez’s leadership for mitigating further damage, contrasting this with the previous administration under Osvaldo Macías, who had requested AFP directors to reaffirm their investment policies. Although Quiroz avoided directly criticizing past governments, he acknowledged that such behavior had been observed for years without adequate action. He stressed that while AFPs have autonomy in managing funds, they must comply with regulations, some of which were deemed insufficient by Cortez upon taking office. Additional restrictions were subsequently implemented, which Quiroz argued proved necessary given the recent developments. The outcome of the SP's investigation will determine whether legal action is taken against the AFPs and their directors. Until then, the focus remains on ensuring accountability and protecting the interests of pensioners affected by the financial downturn.