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Tuesday, March 21, 2023

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MEF on recognition bond: “It will put an end to the National Pension System”

A few weeks ago, the Congressional Commission on the Economy, Banking, Finance and Financial Intelligence insistently approved the opinion that seeks to update the recognition bonus to the contributors and exporters of the Pension Standardization Office (ONP). Thus, everything was ready to be discussed in plenary.

Given this, the Ministry of Economy and Finance (MEF) expressed its concern about the initiative that would demand a high fiscal cost, since it should recognize the contributions made by those affiliates of the ONP who decided to switch to the Private Pension System (SPP) — made up of the AFPs—from 2002 onwards.

According to the head of the MEF, Alex Contreras, if this regulation is approved due to insistence, it would only lead to the disappearance of the National Pension System, which is made up of the ONP, on the verge of discussing its reform.

“A pension reform must ensure the future of affiliates and pensioners. Lhe Recognition Bond Law will put an end to the National Pension System a few months after the reform to be implemented“Contreras said on his Twitter account.

For his part, the director of Pension Management of the General Directorate of Fiscal Management of Human Resources of the MEF, Hugo León, during his participation in the work table “Reform of the pension system”, organized by the Commission for Labor and Congressional Social Security; explained that the recognition bonus It would encourage ONP affiliates to transfer to the SPP, which would cause fewer contributors to the public system and this would lead to the comprehensive payroll of pensioners being financed by the public treasury.

According to MEF estimates, there are 406,000 affiliates aged 65 or over who are migrating to the AFP, which would mean an immediate cost in the first year of S/4,700 million. In this way, if the amount assumed by the public treasury is added annually, it would reach S/11,000 million, representing a strong fiscal pressure for the State.

Finally, the official specified that the recognition bonus It is a future payment promise, that is, when the contributor turns 65, so it does not imply that, once this law is approved, it will be immediately reflected in their individual capitalization account when they pass to the AFP.

Source: Larepublica


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