New withdrawal from AFP: the Minister of the Economy asks Congress to postpone the initiative

Alex ContrerasMinister of Economy and Finance, asked Congress on Wednesday to postpone the initiative for the new withdrawal of funds from the Administrators of Pension Funds (AFP), because this would jeopardize the reform of the pension system.

The title acknowledged that during the health crisis the release of contributions from individual accounts was understandable, but now it is a different context and pensions would lose strength. In addition, the executive branch will present its reform proposal during this month and it will be up to the legislative branch to grant the green light.

“Retirement was understood in the context of a pandemic, in a context where people could not work. It’s a completely different context. The more withdrawals there are, the more the size of the funds will continue to decrease and that will have a long-term cost, in the pensions that will not exist, that will affect the reform”, he explained during the presentation of the Con Punche Peru Agro plan.

“What reform are you going to do if there are no funds. That this decision be postponed, that we have a reform of the pension system and that we now work on structural policies, policies that help the well-being of the citizen, ”he added.

Contreraswho has already said that it is a “populist, negative” and insufficient initiative, added that the withdrawals of private funds from the AFPs complicate the management of the state debt, since what is invested in the long-term country depends on and external savings.

Four days before the end of the legislature, the deputy worthy street (Podemos Peru) asked the Economy Commission to urgently prioritize the bill that proposes the withdrawal of up to 4 ITUs (or 19,800 soles) of funds. However, the period ended last Friday with high expectations for the initiative, which lawmakers said would benefit more than 8.6 million affiliates.

For the moment, the project is Commissariat for the economychaired by the fujimorista rosangelle barbaran. For it to continue in plenary session, it must be debated and approved within the aforementioned parliamentary group, as well as within the Labor Committee, chaired by Sigrid Bazan (Democratic change).

If the green light is given in the two committees, the initiative will be transferred to the plenary session of the Congress to then launch the debate. If approved, the executive will have to respect it or promulgate it in the official gazette. A Peruvian.

For its part, Alfonso Adrianzen, Minister of Labor and Employment Promotion, also spoke out against another withdrawal of AFP funds. “We are already overdoing these measures and we need to do more pension fund protection until we have a comprehensive pension reform,” he said.

There AFP Association (AAFP) presented a few weeks ago a proposal to reform the pension system that guarantees a minimum pension to all Peruvians. Furthermore, he highlighted the importance of the private sector in managing funds and advising members.

The union has proposed including self-employed and informal workers and improving pensions, as currently only three out of 10 workers will have access to Pension.

This approach, which rewards the savings effort, the fundamental basis for building a Pension for old age, aims to guarantee a minimum pension monthly to people with at least 20 years of contributions and a Pension staggered to those who contributed between 10 and 20 years, the AAFP said. The proposal also incorporates seed capital, which involves a state contribution to each newborn.