New ONP recognition bond in the hands of the Plenary

After being observed by the Executive Branch, the Commission for the Economy, Banking, Finance and Financial Intelligence insistently approved the opinion that updates the recognition bonus for contributions and exporters of the Pension Standardization Office (ONP).

In this way, the legislative initiative awaits its respective debate in the plenary session of the Congress. If the green light is obtained again in the chamber, the norm must be signed and promulgated by Parliament.

The approved opinion allows the State to recognize the contributions made by those affiliated with the ONP who decided to switch to the Private Pension System (SPP) —administered by the AFPs— from 2002 onwards.

In other words, the measure not only benefits workers who migrated voluntarily to the SPP, but also current affiliates who make this decision in the future.

It is important to mention that in the years 1992, 1996 and 2001 a recognition bonus was also delivered.

If promulgated by the Congress of the Republic, the Executive power You will have up to 12 months to make this benefit effective for ONP affiliates who migrated to an AFP.

“What is sought within a year is not to sleep the norm, but for the ONP to draw up a regulation that allows all affiliates and ex-affiliates to have that recognition bonus”explained rosangella barbaranpresident of the Economic Commission.

Potential tax cost

For the Ministry of Economy and Finance (MEF), the initiative promoted by Parliament is technically unfeasible due to the fiscal cost that is required and because it would be unconstitutional.

According to the Government, if the measure is approved, the economic impact could reach up to S/40,856 millionwhich considers affiliates who have already migrated to the AFP and contributors who have strong incentives to decide to migrate to the SPP .

However, regarding this fiscal cost, Barbarán indicated that this impact will not be in the short term, since the disbursement is made once the member retires. “If a young person or an adult changes to the Private Pension System, it is not that the transfer of money becomes effective, but that the recognition bonus is generated, which will become effective at the time the person leaves retire,” explained the congresswoman.

Faction of pensioners against the measure

Through an official letter sent to the president of Congress, Joseph Williamsthe General Confederation of Pensioners of Peru (CGPP) requested that the project that seeks to update the recognition bonus be archived, because it directly impacts them and because it promotes the departure of ONP affiliates.

“Any expense that comes out of the ONP Funds, as the aforementioned bill intends to carry out again, will harm the budgetary stability of the ONP and deny any increase to retirees, claiming that there are no resources for it,” the document details.

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Rosangella Barbarán, President of the Economy Commission:

“There is an explanation that was made to the ONP and MEF. The liquidity that they have indicated is false, since this recognition bonus is provided or becomes effective before the person’s retirement.