Chilean AFP Intl Investment Cap to Hit 60%

The Chilean Central Bank has set a schedule for the gradual increase of the limits on overseas investments by the country’s private pension funds. The limit will be raised to 60% next year from the current 40%. The 40% limit will increase to 45% October 1 and then to 50% December 1. Next year, the cap will rise again to 55% on April 1 and then to 60% of the funds’ total AUM on August 3 2009. The central bank says a gradual increase would help managers make an adequate rate of return and provide a degree of security for pensioners. Early this year Chile’s congress approved a pension fund reform bill that, among other measures, permits the gradual rise in the cap on AFPs’ overseas investments. Chile’s AFPs have about $105bn under management.