Find out what happens to your AFP contributions if you stop contributing for a period of time. Do you pay interest or penalty?
No one is free from losing a job and spending a discouraging season without earning income any, that could truncate him in his personal objectives or financial. In this context, the question of many workers arises. What would happen if I stopped contributing to my individual AFP fund for several months? Would I lose my saved money? In this note we clear up these questions.
What happens if I stop contributing my money to the AFP?
According to the official portal of the AFP Associationin case a person stops contributing, your fund will be kept in your Individual Capitalization Account (CIC), which is registered to your first and last name. In addition, his AFP will continue to generate profitability to grant retirement pensions, disability, among others. All this can be checked by reviewing the account statement at any time and place through the website or app of your AFP. In short:
- You do not lose your money, it is kept in your individual account. What you have contributed remains exclusively yoursso you never contribute again.
- Your fund will no longer grow in contributions, but your accumulated money will continue to earn profitability month after month.
- You do not have to pay any penalty, late payment or any type of interest.
- Pension funds have constitutional protection, according to the Article 12 of Chapter 2 of the constitution ”Social security funds and reserves are intangible. The resources are applied in the manner and under the responsibility indicated by law”.
- A negative point is that if you do not contribute your pension it will be lower when you retire.
The AFP Association informs that when you retire, you can choose to receive a pension, through any of the pension modalities available, or withdraw 95.5% of your fund (4.5% goes to EsSalud so that you and your beneficiaries have their coverage).
If I am an independent worker, can I join an AFP?
If you find yourself without a job, but you have the possibility of continuing to contribute, the AFPs recommend making voluntary contributions for pension purposes. If you are an independent worker, Yes, it is possible to join an AFP virtually. The monthly contribution you make as an independent worker will depend on:
- The pension you aspire to obtain when you retire. The higher the contribution, the higher the retirement pension.
- Your age and the number of years of contribution. The longer you contribute, the higher your pension will be. If you start contributing at an early age you will be able to obtain the pension to which you aspire.
How much should I contribute as an independent worker?
Your monthly contribution as an independent worker is calculated based on your monthly income. Contributions to the Private Pension System are divided as follows:
- 10% contribution
- 1.84% sure
- A commission percentage for the administration of your fund, which varies for each AFP.
It should be noted that the minimum contribution amount is S/102.50, which is equivalent to 10% of the current minimum wage (S/1,025).
Source: Larepublica
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