After approving the update of the recognition bonus for those affiliates of the ONP who migrated to the AFPs from 2002 —or seek to do so now—, from the Central Reserve Bank of Peru (BCRP) warn that the initiative promoted by Congress places the public system on the ropes. According to Carlos Montoro, manager of Monetary Policy of the BCRP, “the National Pension System is decompensated, since ONP contributors are the ones who finance current pensioners; and therefore, considering the massive displacement to the AFPs, a model that also subsists due to the injections of State resources would be left without funds.
“The BCRP has been in favor of a comprehensive reform of the pension system. It is important, before making regulations that affect the balance and put old age with a decent pension at risk, to make changes that change that relationship,” added the official. The new recognition bond “would make them disappear because we don’t have that money to return them,” said Hillman Farfán, general manager of the ONP, before the Congressional Economic Commission. A similar position has been maintained by Alex Contreras, head of the Ministry of Economy and Finance (MEF).
“A pension reform must ensure the future of affiliates and pensioners. The recognition bonus law will put an end to the National Pension System a few months after the reform that is going to be implemented, ”he said a few weeks ago on Twitter. While for Guillermo Parra Casas, president of the ONP, the MEF must propose a way out, such as bringing the law before the Constitutional Court.
There are 1.9 million current ONP contributors who have incentives to migrate to an AFP. Photo: Composition LR/ONP
ONP recommends caution: it will be charged at age 65
The ONP emphasized that the recognition bond may be withdrawn as long as the citizen —linked or not to the SNP— turns 65. So, those who migrate to the AFP will not see a sun of their contributions? According to the institution, when switching to the AFP of their convenience, the affiliate starts from scratch in their Individual Capitalization Account (CIC). This could jeopardize your pension and access to health, since the bonus will be available once you reach retirement age. The ONP recommended that its affiliates be properly oriented to find out if they qualify for the recognition bonus and estimate how much their future pension would be “to make a better decision.”
Since when will I be able to access the bonus?
The MEF estimates that up to 4.6 million people would bet on the private AFP system, whether they are contributors or not. Having been validated in Congress at the insistence, the Executive Power has a period of no more than 12 months to issue this recognition bond, detailing the requirements and conditions for people of retirement age to withdraw their money. It will be the power of the SBS to prepare the steps to carry out the withdrawal. In the three previous bonds, the limit was a maximum of S/60,000. The new one will be regulated according to the inflation reported by the INEI.
The pension reform on standby
From the Congress three proposals are elaborated for the reform of the pension system. The initiative of the Labor Commission is not yet in session to vote on the reconsideration of the opinion, rejected in the first instance; while the Economic Commission, according to its president, Rosangella Barbarán, will only approve its text towards the beginning of June. For his part, Congressman Jorge Montoya chairs another group that is in charge of studying a proposal to modify the current system. They don’t have anything either.
Source: Larepublica
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