Recognition Bonus: Everything You Need to Know

Last week, the Congress of the Republic approved the insistence of the measure that seeks to recognize an amount of money to affiliates who transferred from the Pension Standardization Office (ONP) to the AFPs since 2002. Given this, the contributors and exporters of National Pension System (SNP) want to know when they will start receiving this money, how much it will amount to and what is missing before the measure is completed. Here the details.

1. Who will benefit?

A total of 3.1 million workers decided to switch from the ONP to the AFP from 2002 to 2021, according to the Ministry of Economy and Finance (MEF). This group will receive recognition bonus at the time of retirement. According to the former Minister of Economy, Luis Miguel Castilla, around 50,000 members would benefit in the short term. In addition, it is noted that 4.6 million affiliates, between contributors and ex-contributors, would go from the public to the private system.

2. From when will the bonus be accessed?

Since it is an initiative approved by insistence, its official publication will be made in the next few days, from that date the Executive Power will have 12 months to start issuing the bonds. It should be noted that the MEF has the power to establish the requirements and conditions to access this benefit. “The redemption of the recognition bond will be made after two years of having agreed to early retirement or when you turn 65, depending on what happens first,” explains the ONP.

3. Will the bonus be reflected in my AFP account?

Once the ONP affiliate passes to the Private Pension System, he starts a new individual capitalization account with zero contributions. The recognition bonus is a future payment promise that will materialize when affiliates transferred to the AFP turn 65, so they can withdraw it once they reach retirement age.

For this reason, the ONP points out that if an affiliate is over 50 years old and plans to migrate to the AFP, he could put his retirement pension at risk because in the SPP he is beginning to build his pension.

4. Who should migrate to the AFPs?

For the economist Jorge Guillén, this could be an option for those affiliates who are up to 35 years of age, since they have at least 20 years to continue contributing, and who earn a little more than the minimum wage that today is S/1,025. . For his part, the ONP recommends that the affiliate first confirm if he meets the requirements and conditions to access the bonus, “And also what would be your future pension from one or the other system for a better decision”.

5. What is missing for it to come into effect?

For the law to be in force Congress must make the official publication in the newspaper A Peruvian man. It is important to take into account that it is possible that the Executive branch file a claim of unconstitutionality so that it does not become effective, since it implies a total fiscal cost for the State that exceeds S/40,000 million.

“I believe that this request could not necessarily prosper, because the update of the bonds has already been done in the past,” said the economist.

6. Will the national pension system disappear?

From the Central Reserve Bank of Peru (BCRP) it is argued that the ONP is put at risk, especially in this context that is seeking to cement the foundations of the pension reform: “it unbalances the National Pension System (SNP), where the contributors finance the payment of current pensions”, said the manager of Monetary Policy. The head of the MEF, Alex Contreras, also gave his opinion along these lines. “The recognition bond law will put an end to the SNP a few months after the reform that is going to be implemented,” he said.