Pensions would also be sustained with contributions from employers

The reform of the pension system in Peru is inevitable, and that is clear from the Executive Branch and the Legislative.

“The pension system we have is a failure today. I’m not saying that since it was created (…) It is exclusive. It cannot be successful if only 22% of workers are protected. Only two out of ten workers can yearn for a pension”assured the lawyer and teacher Cesar Abanto Revilla during a session of the Congressional Work Commission.

Along these lines, the lawyer – who is also an external member of the review commission of the PCM pension system – announced that the Executive Branch would be seeking to restore the contribution: “Hopefully tripartite, but at least bipartite with the employer and the worker” . If it were with three edges, the State would also have to help improve pensions.

Another of the ideas supported by Abanto was to de-work the system, that is, that informal independent workers also contribute.

Finally, it is examined to raise the contribution rates but apply to a phased model: “A person who earns the minimum cannot be required the same as someone who earns 5,000 or 10,000 solesbut everyone must contribute.”

guarantee and balance

Jorge Salazar, coordinator of the National Confederation of Pensioners of Peru, He pointed out that although the contribution must be raised, it cannot affect the workers; and for this, the social security system must be financed between the State, the employer and the worker, considering the ILO guidelines.

Although, he considers that the administrative body of this new system “should be away from the governments of the day, but not absent”.

Along these lines, the lawyer alvaro vidal recalled that ILO Convention 102 —already ratified by Peru— establishes that the minimum pension must be 40% of the referential remuneration, but this is not fulfilled here, for which the employer’s contribution is necessary and that the State guarantee not only savings, but also solidarity distribution, thus abandoning the individual savings scheme “that has not worked internationally or here”.

From the General Confederation of Retirees they question that there should be parity between the contributions, since the worker gives 13% and the companies between 1% and 5%, which has to be corrected because their profits are generated at the expense of the worker.

dialogue will continue

Sigrid Bazán, president of the Labor Commission, announced that a space will be convened with inputs from previous opinions, proposals from workers and technicians to present a substitute text that will be discussed in said working group. They will even discuss with the PCM commission the execution of a tax reform to know where the resources will come from.

“The only management that had the issue of tax reform ended more than a year and a half ago. Congress discarded it, but the Executive never put it on the table again“, he concluded.

Approach:

Sigrid Bazán, President of the Work Commission:

“We must reformulate a system that does not guarantee social security. It’s time to order the field with everyone (…) A tax reform will be discussed with the PCM commission to propose how to finance it ”.