MEF rules out massive withdrawals from AFPs with the Minimum Pensions Law

The head of the Ministry of Economy and Finance (MEF), Alex Contreras, ruled out that there is an impact of massive withdrawals after the promulgation of Law No. 31670 approved by the Congress of the Republic, which creates minimum pensions and promotes alternative voluntary contributions for pension purposes. He also indicated that the technical team of the MEF is working on its regulations.

“It is a law that has many defects in its origin, we are working on the regulation and if necessary, on some adjustment in the norm, which allows it to be better regulated,” said the head of the MEF.

The minister pointed out that Law No. 31670 and its regulations have to be in line with other laws that protect the rights of citizens, such as the right to have a decent pension. In this sense, he indicated that when they have the final version of the regulations, they will be communicated.

“But we rule out that there is an impact of massive withdrawals, I think that after the sixth withdrawal there was already significant damage to capacity, it is not only about individual savings, but this also has very strong impacts in macroeconomic terms, if one adds the amount of the withdrawals that has had a cost in fiscal terms, the cost of financing,” he said.

The head of the MEF indicated that when he met with investors, he was also consulted about the withdrawal of the Pension Funds from the AFPs, and ruled out any withdrawal and any measure that has a significant impact on the aforementioned resources.

“In the long term, macroeconomists know it, saving is equal to investment, the greater the savings capacity a country has, the greater the investment will be, so this has been key to the development of the capital market, for the infrastructure development,” he explained.