ONP recognition bond will be updated after two decades

With 86 votes in favor, 7 against and 14 abstentions, the Congress of the Republic approved the insistence of the law that updates –after more than 20 years– the recognition bonus for contributors and former contributors of the Pension Standardization Office ( ONP) that passed to an AFP since 2002. Previously, the cutoff for these bonds was in 1992, 1996 and 2001.

This approval was given after the Plenary rejected the previous question so that the legislative proposal returns to the Economic Commission.

rosangella barbaranpresident of the Parliament’s Economy Committee, indicated that the observations of the Executive Power were rejected because The contributions made by ONP affiliates who freely decided to migrate to the AFPs must be recognized.

Upon being approved by insistence, the president of Congress, Jose Williams Zapatamust promulgate the norm.

Initiative Details

In accordance with the approved text, the contributions of those affiliates of the ONP who since 2002 moved to the AFPs will be recognized. This measure also applies to those who decide to migrate in the future from the public to the private system.

According to figures from the Ministry of Economy and Finance (MEF), there are 3.1 million workers who have transferred to the AFP from 2002 to the end of 2021. This would imply an economic impact of S/5,855 million.

In addition, the Executive has detected that close to two million contributors of the National Pension System (SNP) could migrate to an AFP when the regulation is enacted.

It is important to mention that, once the law is published in the newspaper El Peruano, the MEF will have 12 months to issue said recognition bond.

future payment

The director of Pension Management of the General Directorate of Fiscal Management of Human Resources of the MEF, Hugo Leonclarified a few weeks ago that this measure does not imply that affiliates who have migrated to an AFP are going to see the money in their individual capitalization account immediately, since the recognition bonus is a promise of future payment that materializes when the Affiliates transferred to the SPP turn 65 years old.

The MEF official explained that an affiliate who transfers from the national to the private system will start with zero contribution in his AFP account and, after he is 65 years old, the recognition bonus will be granted.

ONP could disappear

The MEF expressed its concern on several occasions regarding the recognition bond approved by the Legislature, since this would lead to the SNP, made up of the ONP, practically disappearing.

This would occur because, according to the MEF, as the proposal is written, it would lead to all the ONP contributors being transferred to the AFPs, thus causing the entire SNP pensioner payroll to be financed by the Public Treasury.

This warning was conveyed by the president of the Congressional Labor Commission, Sigrid Bazán, who commented that, despite being in favor of an update of the ONP recognition bond, the negative impacts of it must also be taken into account. .

“If this initiative is approved, the ONP, which does not have funds, will have to use the Consolidated Pension Reserve Fundwhich is a guarantee of payment for the rest that stays,” said the congresswoman.

Data

Tax cost. According to the MEF, the economic impact of the measure would amount to S/40,856 milliontaking into account ONP affiliates with strong incentives to switch to an AFP.

reactions

Rosangella Barbarán, President of the Economic Commission of Congress

“The pay-as-you-go system has failed in the country, every year the contributors decrease and the retirees increase. That is to say, In about five or ten years this system will have collapsed and the money will flow out of the state coffers.”.

Sigrid Bazán, President of the Labor Commission of the Congress

“I am in favor of the recognition bonus, but I have to think about the people who are in the ONP, they want to see a pension and that they would be affected if legislated irresponsibly.”