The Association of Pension Fund Managers sought to explain the plunge in Fund E, which fell 10.4% between January and September 2026. In a statement, the industry association maintained that the losses reflected "a long-term strategy" rather than a bet by the fund managers.
According to Emol, the decline prompted lawmakers across the political spectrum to send a formal request for information to the Superintendency of Pensions, the agency that oversees pension fund managers. Fund E has the lowest risk of the five pension funds, which is why the hit drew attention.
The association said the decline "was concentrated mainly in September". It attributed this to the interest rate increase by the United States Federal Reserve (the country's central bank), which reduced bond values worldwide.
The mechanism works like a seesaw. When rates rise, previously issued bonds, which pay lower interest, are worth less on the market. "Although they are called 'fixed income,' these investments can lose value when rates rise," the association said.
For context, the pension fund managers noted that Fund E returned 8.06% in 2025. They also cited 2021, when it fell 13.11% in real terms, a loss it had recovered by the end of 2025. They cautioned, however, that this precedent does not guarantee a future recovery.
The association added that, across all five funds, Chileans' savings had grown by USD 10 thousand 778 million so far this year. In other words, Fund E's decline is not reflected in the system's overall performance.
If you are concerned about being close to retirement, the association offers a data point. Fund E is a voluntary choice, while the default allocation distributes members among funds B, C and D according to age. Most people nearing retirement are in Fund D.
According to the association, most Fund E members are between 30 and 45 years old, and only 10% are aged 60 or older. According to BioBioChile, the association added that, for those who can choose a lifetime annuity, higher rates would offset part of the decline in savings.
The most contentious issue involves derivatives, contracts whose value depends on another variable, such as an interest rate. According to BioBioChile, the pension fund managers accumulated foreign interest rate swaps (agreements to exchange payments linked to interest rates) that would gain value if rates fell, something that did not happen as energy and fuel became more expensive.
The association defended their use. "In all fixed-income funds worldwide, derivatives are used to adjust the timing of cash flows," it said. It also linked these investments to the pandemic withdrawals, which reduced the availability of local long-term fixed-income instruments.
AFP Uno, which does not belong to the association, acknowledged that funds D and E have not delivered the expected results. However, it said that, as of September 2026, both had positive annualized real returns over the past 36 and 60 months across the industry. It remains unclear when the Superintendency will respond to the lawmakers' formal request.
