The Superintendency of Pensions has opened sanction proceedings against all seven AFPs (pension fund administrators) in the system over the decline in Fund E, according to Emol. The process could last about nine months.
The regulator made the decision after completing its investigation into losses in Funds D and E. All seven administrators followed a common strategy: investing in financial derivatives, contracts whose value depends on another variable, in this case United States interest rates.
The result shows up in account statements. Fund E, the most conservative fund and typically where people nearing retirement hold their savings, recorded a negative real return of 10.39% between January and September. Put simply, if you had $10 million there in January, it was worth about $8.96 million in real terms in September.
The focus is on the duty of "loyalty and diligence," set out in Decree Law 3,500, which governs the pension system, and in a General Regulation issued in July 2025. That obligation requires AFPs to ensure adequate investment returns and security. This is known as fiduciary duty: the standard of care required of anyone managing other people's money.
Finance Minister Jorge Quiroz said the aim is to determine whether the losses reflect the inherent nature of investment management or whether there was "carelessness, negligence or reckless conduct by the AFPs". He backed the regulator, while clarifying that its role is not to determine investments, and noted that, by law, directors who breach their duty of diligence are liable with their own assets.
The proceedings are led by the Superintendency's investigator, Mario Valderrama. As he told El Mercurio, he and Superintendent Joaquín Cortez agreed to separate the formulation of charges from the final decision as a sign of independence.
The first stage is the formulation of charges. A team of engineers, auditors and lawyers is reviewing board and investment committee meetings, as well as each executive's incentives. Each AFP then submits its defense and evidence, and the superintendent ultimately decides on the sanction proposed by the investigative office.
These proceedings usually conclude within six months, but deadlines can be extended. Valderrama estimates that, given the complexity of the case, this one could take close to nine months. The source does not specify potential fine amounts.
The sanctions will take into account the severity of the breach, any benefit to the administrator, the systemic impact, the degree of involvement and repeat offenses. As mitigating factors, the investigator highlighted cooperation and, above all, an AFP's decision to compensate affected members on its own initiative. That is the point that matters most to your finances.
Valderrama warned that complying with regulatory limits is not enough: "It is not a question of how much, but of why the decision was made".
Meanwhile, at least four constitutional protection petitions have reached the courts against Capital, UNO, Habitat and Modelo. One, filed by an AFP Capital member whose savings fell from $94.5 million in April to $86.4 million in October, was declared inadmissible by the Santiago Court, which found that a protection petition was not the appropriate legal avenue.
There are also two criminal actions alleging possible disloyal administration: one brought by Deputy José Montalva and another by Daniel Manouchehri and Senator Daniella Cicardini. Coordinadora No+AFP is collecting account statements to assess potential class actions.
Experts see a difficult path through the courts. "It is not enough to argue that there was an error," Patricio Zapata, an academic at UC, told El Mercurio, adding that an undisputed right must be established and a petition filed within 30 days. Eduardo Cordero, of PUCV, said protection petitions are very rarely upheld in such heavily regulated sectors.
There is disagreement over restoring the funds. Zapata believes that quantifying damages could require a civil trial. Tomás Jordán, of Alberto Hurtado University, says that if a constitutional violation is established, the court could order the funds restored.
The precedent involving private health insurers, with mass petitions and restitution orders, is emerging as a reference point. Zapata warns that an initial favorable ruling could trigger a wave of petitions. Catalina Salem, of UDD, offers a qualification: the current Supreme Court has shown itself to be "more reluctant" to resolve these matters through protection petitions.
