Dominican Republic pension funds face scrutiny over investment practices

The pension system in the Dominican Republic is facing scrutiny regarding how individual capitalization funds are managed and invested. Critics, including authors Francisco Alberto Tavárez Vásquez and Matías Bosch Carcuro, argue that the system functions as a financial extractive scheme. They claim that over 80% of pension funds are concentrated in public debt and private instruments linked to large economic groups, benefiting business elites while providing insufficient pensions for workers.

In response to these criticisms, economist Andrés Dauhajre hijo defended the system, noting that as of June 2026, pension funds have accumulated RD$1.32 trillion, representing 16% of the national GDP. He stated that investment returns have generated RD$500,900 million for workers, with an average annual profitability of 12.2% over the last two decades. Dauhajre noted that only 2% of savings are currently placed in Dominican company stocks and bonds, and he proposed allowing at least 10% of savings to be invested in global stocks and bonds to improve diversification.