The affiliates of the Pension Fund Administrators (AFP) that want to retire They must have the minimum age of 65 years, as required by law. However, there is a modality in the Private Pension System (SPP) to access a pension much earlier. From what age and what requirements should i continue? We tell you here.
This option is called early retirement, and in order to activate it, certain parameters must be met:
a) Be 50 years old.
b) Not having a formal job for at least one year.
c) At the time of retirement, access must be made with the amount accumulated in the account equivalent to a pension greater than 40% of average earnings received in the last 120 months (10 years).
What does this last requirement mean?
According to Joaquín Rey, public policy adviser to the Association of Pension Fund Administrators (AAFP), if the affiliate is 50 years old and wants to access the early retirement (Grid)the first thing to do is “verify with your AFP if heor accumulated in your individual capitalization account will allow you to have a pension of at least 40% of your salary received in the last years of working life, discounting gratuities“, he indicated to Andina.
If at the time of the request the affiliate does not reach that minimum amount of contributions, he will have to wait and accumulate a little more money, because, according to Rey, the goal is to protect retirement. “Seeking that the fund to which it accesses allows it a standard that is not significantly lower. This is the fundamental requirement,” she added.
Will my pension be the same as in a regular retirement?
When you reach that age, as in the case of regular retirement, you can access a pension or alternatively you can withdraw 95.5% of the fund.
AFP: how is the pension calculated?
A contributor accumulates his money in a fund and, at the time of retirement, the pension that would correspond to him given what is accumulated in his capitalization account is calculated from that amount. “In the case of REJA, to evaluate the request, the calculation returned must be at least 40% of the salary received in the last 10 years,” he stressed.
He Private Pension System It has about 8 million affiliates, however, according to Joaquín Rey, not all are contributing permanently. “The nature of the labor system is that there are many workers who transition between informality and formality. In the Peruvian case, independent informal workers are not included, there is no pension system to incorporate them,” he said.
AFP: what is the minimum pension?
The private system depends on individual effort. Currently, there is no minimum pension, it will depend on everything one contributes to the pension. “In the private system, the average pension is more than double the average pension of the ONP,” he said.
The Pension Fund Administrators (AFP) that operate in the country presented their proposal three weeks ago for a possible reform of the Peruvian pension system. In this approach, they consider a minimum pension for all affiliates: those who contribute 10 years would receive a proportional amount and those who reach 20 years would obtain a guaranteed pension, equivalent to the S/583 that exists today in the public pension system.
Source: Larepublica
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