"It breaks my heart”, replied our Chilean friend José Piñera, the architect of the individual capitalization pension model, when I messaged him at 10:34 p.m. on Tuesday, April 8, to convey the devastating news of the sudden deaths of Eduardo Grullón -founder and president of AFP Popular- along with his wife Jhoanna and sister Alexandra. They were among the 226 victims of the deadliest tragedy to strike our nation this century: the collapse of a nightclub roof.

 

José Piñera -the individual I described in a column nearly 30 years ago as “the man with the little notebook”- helped strengthen a friendship with Eduardo that began when we were neighbors in Los Rosales. It grew deeper through our shared conviction that our country would advance significantly with a pension system similar to the one José had designed and implemented in Chile 45 years earlier.

 

The memories return vividly. In May 1991, my Fundación Economía y Desarrollo invited José Piñera to the Dominican Republic to explain the labor reform he had conceived and executed as Chile’s Minister of Labor and Social Welfare.

 

Later, in early January 1998, Eduardo contacted me to assist in convincing José to return, this time to discuss his most renowned and transformative reform -the pension system- at a seminar organized by ANJE, the association Eduardo presided over.

 

Finally, in early August 2007, Eduardo called again to inform me that he had arranged José’s third visit to the country for a series of meetings with union leaders and business executives, television appearances, and a luncheon on Wednesday, August 15, hosted by the American Chamber of Commerce, where José titled his address: “The Capitalization Revolution: Toward a World of Worker-Owners.”

 

It is undeniable that the Dominican Republic has lost the business leader most committed to enhancing workers’ well-being through an individual capitalization pension system.

 

The system that Eduardo Grullón helped establish within Grupo Popular now encompasses 5 million affiliates who, as of the end of last February, held $17.6 billion in their individual capitalization accounts, of which $9.3 billion resulted from the returns achieved by the pension fund administrators.

 

Despite the stringent regulatory constraints on the investment of workers’ pension savings, the system has ensured that, for every 100 pesos in the average worker’s individual capitalization account, 53 are attributable to the returns generated by their AFP.

 

Nevertheless, the system cannot perform miracles. Retiring at age 60 -the legal retirement age in the Dominican Republic- will not yield substantial pensions. The individual capitalization system cannot replicate the biblical multiplication of five loaves and two fish to feed thousands. With an average contribution rate of 8% of salary over 30 years, it is impossible to generate a substantial pension for 20 years.

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The system requires Congress to adjust its core parameters: gradually increasing the contribution rate to 15% of salary, in line with the changes implemented in Mexico, which raised its rate from 6% to 15%, and in Chile, which will progressively increase it from 10% to 16%. This must be accompanied by a gradual rise in the retirement age from 60 to 65 years.

 

With Eduardo Grullón’s passing, I have lost my most steadfast ally in the private sector in this effort -an ally who, through his actions on behalf of workers, had forged bridges of understanding, comprehension, and credibility with the leaders of the country’s principal union confederations. Despite this loss, I will continue advocating for these enhancements to the system.

 

I am confident that the president elected in 2028 will recognize the necessity of these adjustments and implement them, understanding that they are essential for sustained economic growth and to ensure dignified retirements for our workers.

 

In the not-too-distant future, Eduardo’s children will experience profound satisfaction and pride upon realizing that their father contributed to building a pension system that has increased savings, promoted investment, stimulated growth, and ensured economic stability.

 

Without the capitalization system, the Dominican economy would be in dire straits.