First pension reform proposal fails

With 8 votes in favor and 11 against, the Labor and Social Security Commission of the Congress of the Republic rejected the first prediction that pointed to the reform of the Peruvian pension system.

The benches of Fuerza Popular, Acción Popular, Avanza País and Renovación Popular, mainly, opposed this initiative, arguing that further study is needed. However, several leftist congressmen requested a reconsideration of the vote, which will take place next week.

If the reconsideration is successful, the president of the Work CommissionSigrid Bazán, announced that a new replacement text will be presented that incorporates the contributions made by various parliamentarians.

comprehensive system

The initiative that did not obtain the approval of the Labor Commission proposed the creation of a Universal Integrated Pension System (SIUP), which included the public and private systems, as well as the social programs Pensión 65 and Contigo. In addition, the contribution would be tripartite: worker, employer and State.

According to the proposal, the Universal Basic Old-Age Pension (PBUV) and the Universal Basic Pension for Disability (PBUD) would be established. Those who reach 65 years of age would receive a basic pension as long as they prove 15 years of contributions. This will not be less than the basic basket of individual consumption.

A proportional pension is also contemplated for those with a minimum of 10 years of contributions. Those who contribute less than five years would receive compensation.

BCRP rejects AFP withdrawal

Julio Velarde, president of the BCRP, said that a new AFP withdrawal will end up eliminating the system and leaving affiliates without pensions.

“It really is crazy to disappear a pension system, which can be corrected, making reforms is something else, (but) they are destroying a pension system,” Velarde commented.