There is room to raise the minimum pension in the ONP

The minimum pension in the National Pension System (SPP) it has only been updated twice in 23 years, so there is room to increase it, since it has lost a lot of purchasing power, according to the economist and professor at the Universidad del Pacífico, Noelia Bernal. .

Predictability is sought

“In the national system there is a State subsidy, which guarantees a minimum pension with 20 years of contributions. It is a very attractive option for the vast majority of workers in Peru who earn less than S/2,000. because with that salary he does not reach a pension of S/500 in the AFP system”, explained Bernal during his presentation at the Economic Commission of the Congress of the Republic.

Ungrouped Congressman Carlos Anderson questioned the defined benefit system. From his perspective, it is not a favorable option for our country, since there is not a broad tax base to support it; In addition, over time it plays against demography, that is, there are more people in retirement age which contributing population. “Virtually all defined benefit systems are bankrupt,” he asserted.

The specialist pointed out that demographic changes affect not only the national system, but also the private one. In addition, you can choose to create a pension reserve fund, as Sweden, Canada or Chile have, the latter allocates one point of its GDP for this purpose. “Defined benefit systems do not have to be broken if parametric reforms are made to the interior that ensure sustainability”, he noted.

In turn, the general manager of the Peruvian Institute of Economics (IPE), Diego Macera, spoke in favor of minimum pensions, stressing that it gives contributors predictability. “Part of the advantage that the ONP has today over the AFPs is that the member knows that at least if he completes 10 or 15 years of contribution he will have a certain level of pension,” he said.

How could it be implemented in the private system? Macera explained that if the capitalization account is not large enough to reach S/500, then the State could make up the difference.

Both specialists agreed that the Pension 65 social program should expand its coverage, since today it only benefits people in extreme poverty and there is fiscal space to do so.

How is the outlook today?

An example that helps to illustrate the picture is that, if we look at two workers with salaries of S/1,500 each, after 20 years, the one who is in the ONP will have a higher pension than the affiliate in an AFP, which hopefully it will reach S/400, according to Bernal.

Therefore, it is not surprising that almost 10,000 workers affiliated tothe private system Today they have a pension of less than S/500, according to the Superintendency of Banking, Insurance and AFP (SBS).

If we disaggregate this figure, it can be seen that around 8,000 people receive from the AFP between S/100 and S/500 pension, while almost 2,000 get less than S/100.

Regarding the evolution of pensions in relation to salary, due to different factors, this has been gradually reduced in both systems, but especially in the private one. By 2021, the pension is equivalent to 44% of the average salary in the ONP, with which it has fallen by 19 percentage points in 20 years. To the other side, the AFP pension is equivalent to 34% of salary, when before it was 79% (45 points less), according to the economist’s analysis.

Data

Owners. Of the three largest, AFP Integra belongs to Grupo Sura, Prima AFP belongs to Grupo Credicorp, while Profuturo AFP belongs to Canadian bank Scotiabank.

Reform. Yesterday, Credicorp presented its proposal to reform the pension system, in which the State contributes one by one with the member.

reactions

Diego Macera, general manager of the IPE

“We have to try a transition scheme. The biggest cost is in transferring ONP affiliates to individual capitalization accounts. It is not cheap”.

Noelia Bernal, economist at the Universidad del Pacífico

“The reform that is carried out must take advantage of the advantages of both systems. Let’s use the best of each one to build a new one that is superior.”

How much does a pensioner of Decree Law No. 19990 earn?

According to Headquarters Resolution No. 027-99-HEADQUARTERS/ONPthe maximum monthly pension that the Pension Standardization Office (ONP) will pay in the National Pension System (SNP) is from S/. 807.36.