The losses pension funds had built up on their interest rate swaps with international banks fell to about US$2.9 billion at the end of October 2026, from US$7.7 billion at the end of September, according to Pensions Superintendency figures published on Tuesday, November 10, and cited by Diario Financiero (Bloomberg). The relief came from the drop in US Treasury yields in October: Fund E returned 3.2% in the month and Fund D 1.8%. Even so, Fund E is down 7.56% in real terms so far in 2026, and members who retired in the worst months now have a way to improve their pension: an extraordinary recalculation they can request until December 31.
View the data as a table
| Swap losses (foreign banks) | US$2,900 million |
| Fund E return in October | 3.2% |
| Fund E in 2026 (real, to October) | -7.56% |
| Programmed withdrawal rate since October | 3.67% |
What happened to Fund E and the AFP swaps
For two years, AFPs built interest rate swap positions that gained if US bond yields fell. This year the global rise in rates turned the bet around: Fund E, the most conservative, fell 4.92% in September alone, its worst month since October 2024. The 10-year Treasury yield, which neared 5.3%, fell more than 30 basis points in October, the biggest monthly drop since 2023, and that reduced the losses (Diario Financiero (Bloomberg)). The government's measure, which includes local and international banks, fell from US$10.1 billion at the end of September to about US$7 billion as of October 20. The Superintendency opened proceedings against all seven AFPs for possible breaches of their fiduciary duties in managing derivatives, and the deadline to meet new exposure limits expired in early November.
How much pensions fell because of the Fund E drop
For a new retiree, what matters is not the fund's drop but the pension's, as Superintendent Joaquín Cortez put it. The same rate increases that hit the funds make pensions cheaper, because insurers and the programmed withdrawal formula use higher rates. With that effect, Fund E members who retired in September got pensions 9% to 10% lower than if they had retired in December 2025; in October the drop shrank to 5% to 6%, according to La Tercera:
| Fund and type | Retired in September | Retired in October |
|---|---|---|
| Fund E, programmed withdrawal | -10% | -5% |
| Fund E, annuity | -9% | -6% |
| Fund D, programmed withdrawal | -6% | -2% |
| Fund D, annuity | -5% | -3% |
Compared with the pension they would have obtained in December 2025. Source: La Tercera, with Pensions Superintendency estimates. About 28,000 people of retirement age (men over 65 and women over 60) are in Fund E, and about 338,000 in Fund D.
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See advertising optionsProgrammed withdrawal recalculation after the Fund E drop: who can request it
The Pensions Superintendency exceptionally authorized AFPs to carry out extraordinary recalculations of programmed withdrawal and temporary income pensions calculated or recalculated in July, August and September 2026, according to La Tercera and BioBioChile. The reason is that since October a higher calculation rate of 3.67% applies, which gives larger pensions from the same balance. The conditions are:
- The retiree must request it expressly from their AFP.
- It only applies if the recalculated pension is higher in UF.
- The deadline to request it is December 31, 2026, and it must take effect by the January 2027 payment at the latest.
- The AFP must warn that the increase is funded from the retiree's own savings and does not change the date of annual recalculations.
- It does not apply to annuities, because the insurer sets their rate and it is locked when the contract is signed.
The technical interest rate for programmed withdrawals is set by the Superintendency by circular. It went from 3.31% in January to 3.45% in July and 3.67% in October (Circular No. 2425), the highest since late 2024, and from November 3 it will be reviewed monthly instead of quarterly (Pensions Superintendency). The difference between programmed withdrawal and annuity, and how their rates compare, is explained in annuity or programmed withdrawal.
View the data as a table
| Technical rate | |
|---|---|
| Oct 2024 | 4.14% |
| Jan 2025 | 3.43% |
| Apr 2025 | 3.54% |
| Oct 2025 | 3.41% |
| Jan 2026 | 3.31% |
| Jul 2026 | 3.45% |
| Oct 2026 | 3.67% |
For people close to retirement, the episode leaves two lessons: "conservative" funds can also fall when rates rise, and choosing the fund and the timing of retirement has permanent effects. Each fund's and AFP's historical returns are in AFP returns in 2026. This article is informative and is not a recommendation to switch funds; before deciding, review your personal situation with your AFP or a pension advisor.
How many people are in Funds D and E
Fund D has 1,575,754 members, about 620,000 of them (almost 40%) aged 60 or over; Fund E has about 69,000 people aged 60 or over, according to figures cited by La Tercera. Fund B has about 39,000 non-retired members and Fund C almost 103,000 active members and programmed withdrawal retirees, according to La Tercera. These are the groups most exposed to what happens with interest rates in the coming months, because they are close to retirement or already draw a pension from their account.
For members still working, the fund's drop can be recovered over time; for those retiring, it is locked into the pension. That is why it is worth reviewing your fund before applying for a pension and comparing costs across managers, which we compare in best AFPs 2026. For those with low pensions, the PGU tops up the amount subject to requirements.
Frequently asked questions about Fund E and the recalculation
How much has Fund E lost in 2026?
As of October it has a real return of -7.56% for the year; as of September it was -10.39%.
Who can request the extraordinary recalculation?
Retirees on programmed withdrawal or temporary income whose pension was calculated or recalculated in July, August or September 2026, until December 31.
Can annuities be recalculated?
No. An annuity's rate is locked when the contract with the insurer is signed.
How much did AFPs lose on swaps?
About US$2.9 billion at the end of October on swaps with international banks, versus US$7.7 billion at the end of September.
