ONP: 4.6 million would stop contributing after the Recognition Bond was approved

After the Congress of the Republic approved, on April 13, at the insistence of the autograph of the law that updates the Recognition Bond for contributors and ex-contributors of the Pension Standardization Office (ONP), the latter entity ruled and pointed out that this measure will seriously jeopardize the sustainability of the National Pension System (SNPs).

Victorhugo Montoya, head of the ONP, pointed out that said norm approved by Parliament will promote a massive migration of contributors to the AFPs, which would imply that the State assumes a fiscal cost that exceeds S/40,000 million.

“The approval of this new recognition bond will aggravate this financial imbalance because It is estimated that around 4.6 million affiliates could stop contributing to the National Pension System“said the official through a press release.

Montoya Chávez explained that, due to the lack of contributions that the system would have for this initiative, a direct impact will be generated in the financing of the payment of the pensions. This, because the contributions of the affiliates are used to pay the monthly payroll of the more than 630,000 insured throughout Peru.

The head of the ONP stated that the institution he leads is making efforts so that more affiliates can contribute regularly with the aim of contributing to the SNP’s finances being balanced and thus guaranteeing its sustainability over time.

Who benefits from the Recognition Bonus?

The Recognition Bonus seeks to remunerate the contributions of those ONP affiliates who since 2002 moved to the AFPs. This measure also applies to those who decide to migrate in the future from the public to the private system.

There are 3.1 million workers who went from the ONP to the AFP from 2002 to the end of 2021, according to figures from the Ministry of Economy and Finance (MEF).