AFP propose assuming losses in negative profitability

The AFPs want the new pension scheme to continue to be managed by the private sector —and by other interested managers—, since “It would be a mistake for the State to administer them because it is subject to political pressure.”

One of the questions about the private model is that, despite the drop in the profitability of the funds, the AFPs continued to win.

For example, in 2022 they accumulated S/471 millionbut the short-term profitability of most of the funds —except fund 0— had losses.

At this point, the AFPs now propose a commission for performance, with which only a fixed component would be contributed for operating costs, while the variable component, linked to the profitability of a fund, in the event of losses, will make the affiliate is not charged a sol.

Been away but not absent

They also propose a minimum pension for everyone from birth through seed capital, with which Pension 65 would be replaced.

And what role would the state play? With the matched contribution, they seek that this universal pension reaches not only formal dependents, but also independent and informal ones once they reach 65 years of age. Here, “for each sol contributed by the affiliate, the State gives an equivalent amount until reaching a minimum pension”summarized Prialé.

They also propose that the 1% of VAT paid in the year by the affiliate and that the tax deduction be applied to the companies that contribute to the retirement fund of their workers with lower income.

Under these edges, Prialé gave the following example: all Peruvians who contribute 10 years will have a proportional pension and those who reach 20 years, a guaranteed pension, equivalent to at least the S/583 that exist today in the public system.

AFPs no longer work

The Economist javier olivera He questioned the lack of will of the political class to materialize once and for all the pension reform, which must be fair and fiscally responsible.

In his opinion, there is a disconnection problem in the current systems, to the point that the AFP model “It cannot be called a pension system because it does not provide them”, and it is, rather, one of “compulsory savings”.

“Let’s call things what they are. It doesn’t work anymore (private). national system survived time. Although it has a financing problem and lower income from contributions, for better or worse it has important solidarity mechanisms and minimum pensions were approved for those who contributed 10 years,” he said in the Congressional Labor Commission.

Olivera agrees in the universalization of social protection with contributory pillars so as not only to be limited to the extremely vulnerable population, as in Pensión 65. In summary, despite his criticism of the AFPs, he recognizes that the new pension system must be located in the middle and mixed to diversify sources of income for a dignified old age: social pension, distributive distribution and with individual accountssince “the solution is not an extreme model”.

Pension reform ready before June

The pension reform in charge of the Presidency of the Council of Ministers (PCM) must be delivered until May 31 of this year. From the AFP they recognized that they have held various meetings with officials of the Dina Boluarte regime.

Will affiliates have any say in the investments of their contributions in the new pension model proposed by the AFPs? No. Aldo Ferrinigeneral manager of AFP Integra, announced that this process is highly regulated by the SBS, which operates on behalf of affiliates.

Finally, Ferrini highlighted that The country is going through a good fiscal moment to be able to assume a more intensive role in the new pension model, as long as there is coordination.

Approach:

Giovanna Prialé, President of the AFP Association:

“People (at ONP) don’t have an individual account. And what they receive will depend on how much they are contributing (…). We believe that the public system could move towards one of individual capitalization”.

Javier Olivera, Economist:

“The private system of the AFPs cannot be called pensions because it does not give them. Either you withdraw it or you reach 65 years and you take 95.5%. It is a mandatory savings system. It no longer works”.