PRODUCTS AND SERVICES INDUSTRIES CAPABILITIES

Pension Fund Administration Solution

Pension Fund Administrators (PFA) are private institutions, responsible for managing the pension funds composed of individual capitalization accounts. Because such task is highly intensive in information, SONDA developed a solution that encompasses all activities of these institutions value chain, and that have the advantage of having been successfully conceived alongside the birth, in Chile, of the social security system based on individual accounts

Our PFA solution, AFP.NET, is composed by an integrated set of applications, running on state of the art technology, and among its functionalities are the collections process, the individual accounts handling, the benefits calculations, the investment management, as well as the provision of the services to the pension fund affiliate.

As the individual account social security model was implemented in other countries, SONDA took advantage of its expertise and was able to adapt its solution to each particular regulatory and business model environment. As a result, with more than 24 years of experience, we are the leading PFA system provider in Chile and are present in other six countries: Argentina, Brazil, Costa Rica, Dominican Republic, Mexico and Peru. More recently, SONDA has moved into Africa and Eastern Europe.

History and Evolution

History and Experience

In 1980 Chile settled up a new pension funds system by law. Its objective was to ensure that every worker or beneficiary receives his benefits as and when due (retirement, disability or survivorship pensions). It’s a system of defined benefits, with individual accounts, managed through private entities formed specially for this purpose.

From that same date, SONDA decided to invest in the development of an integral IT solution for the operations and management of these private funds. As there was no previous experience at world level, SONDA pioneered the first system for this newly born industry and soon became its main technology partner.

Evolution

Since our first release in 1980, there have been various versions according to the changes of technology, from the monolithic first solution to the latest version, a web enabled system. It has also grown in functionality, providing greater depth to our clients. For instance, nowadays it encompasses a growing set of pension products (savings accounts, voluntary contributions, “401k” contributions, etc). At the same time, it has been successfully adapted to several countries that have conducted social security reforms in line with the Chilean original system. After 24 years, the AFP.NET solution has incorporated the experience of one hundred specialized professionals and nearly one million hours/man applied in projects throughout Latin America.

On the other hand, since its early days the Pension Fund Administrator industry has experienced a big trend towards consolidation, which required SONDA to carry out more than 20 projects of migration of other platforms into SONDA’s solution.

Lately the industry has gone through a series of fast changes, as users become more aware of the retirement issue. As a result, there are demands for better service, as well as for new savings mechanisms. The birth of the multifund system, which does a better job in handling different risk/return preferences, is a response to these requirements.

Today SONDA is again pioneering the world market by developing the first pension auction system for Chile, an electronic platform available through the internet that connects the information among the PFA’s and the life insurance companies, so that there is more competition in the pension offers a person receives when she is retiring. This has promoted the transparency of the system and resulted in better pensions.

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