Congress approves pension system reform: End of AFP withdrawals?

The reform of the pension system consists of a series of modifications to the next AFP withdrawals and how to make them

He Congress ratified, in a second vote, the pension system reform that, among other aspects, prohibits future withdrawals of AFP funds. Now, it will depend on whether the autograph is promulgated or observed by the Executive.

He Minister of Economy, José Aristaexpressed his support for the ruling, and also commented that the ban on withdrawals is something positive, although he noted that it is necessary to analyze the final version of the document before making a final decision.

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What are the reforms implemented by Congress?

• Prohibition of withdrawals: The new system prohibits the total or partial withdrawal of funds accumulated in individual accounts of mandatory contributions by members during their active stage. This means that new extraordinary withdrawals will not be allowed in situations of economic crisis or health emergencies.
• Consumption contribution: The legislative proposal creates the “consumption contribution”, a voluntary contribution for pension purposes that comes from consumption expenses made by members. The payment vouchers considered for this contribution can have a maximum value of up to S/ 700.
• Retirement age: The retirement age in the new system is set at 65 for men and women. The age to access an early, ordinary or unemployment pension is 55 years or older.
• Restrictions for new members: New members of the system and those under 40 years of age will not be able to choose to withdraw up to 95.5% of the total fund available in their Individual Capitalization Account (CIC) in any withdrawal method. They will only be able to receive the pension that corresponds to them.