Due to the economic crisis and the rise in food prices, many Peruvians wonder if there will be a new withdrawal from the AFPs that will allow them to have extra money. In this regard, there are 10 bills in Congress to authorize the release of these funds, but they did not prosper in the Economy Commission during the previous legislature. In addition to this, the Ministry of Economy and Finance has presented a proposal to reform the pension system that includes a measure to prohibit extraordinary withdrawals. If you want to know more details about these initiatives, keep reading this note from La República.
AFP withdrawal: what is the status of the bills in Congress?
In the Legislative Branch, there are 10 bills that seek to authorize a seventh withdrawal of funds from the Private Pension System (SPP). Seven of them are related to the release of 5 UIT, 4 UIT, 3 UIT, as well as 50% and 70%, so that citizens have extra money to face the rise in basic food prices. .
In the case of the other legislative initiatives, they propose expanding the withdrawal amount to buy a property or pay mortgage debts:
- AFP withdrawal of up to 4 UIT (S/19,800) – Digna Calle (Podemos Peru)
- AFP withdrawal of up to 3 UIT (S/14,850) – Víctor Cutipa (Perú Bicentenario)
- AFP withdrawal of 50% of funds – Elías Ávalos (Podemos Peru)
- AFP withdrawal of 70% of funds – Américo Gonza (Perú Libre)
- AFP withdrawal of 50% of funds for home purchase – Patricia Juárez (Popular Force)
- AFP withdrawal of 3 UIT (S/14,850) – Víctor Flores (Popular Force)
- AFP withdrawal of 5 UIT (S/24,750) – Jaime Quito (Free Peru)
- AFP withdrawal of 4 UIT (S/19,800) – Guido Bellido (Peru Bicentennial)
- 25% AFP withdrawal to pay mortgage-backed debts – Melissa Córdova (Avanza País)
- 100% AFP withdrawal for home purchase – Ilich López (Popular Action).
As is public knowledge, all these projects failed to be ruled on by the Economic Commission chaired by Fuerza Popular congresswoman Rosángella Barbarán during the last legislature that ended on June 23. Now, it is expected that with the approval of the new table of commissions 2023-2024 to be carried out in plenary this Monday, August 14, ordinary activities will restart. Among them, the Economy Commission, whose presidency would fall to César Revilla (FP), and in the case of the Labor Commission, this would be chaired by Pasión Dávila from the Magisterial Bloc.
AFP withdrawal: what does the Executive Branch propose?
The Ministry of Economy pre-published a few days ago a proposal to reform the pension system, which includes limiting the use of money from the Pension Fund Administrators (AFP). In this sense, said initiative seeks to prohibit these optional and extraordinary withdrawals to avoid distorting pension savings.
“From the entry into force of this law, the partial or extraordinary withdrawal of funds accumulated in the CIC of mandatory contributions of the Private Pension System by affiliates during their active stage will be prohibited,” indicates the document presented by the MEF based on the analysis of the group of institutions that make up the Multisectoral Commission.
In this way, the release of funds from the AFPs could only be withdrawn in two cases: the first one, entitles affiliates to have up to 25% of the fund from their Individual Capitalization Account (CIC) to pay the initial installment or amortize a mortgage loan of a first property.
In the second case, up to 50% of the savings fund could be withdrawn if the affiliate suffers from a terminal illness or has a cancer diagnosis that reduces their life expectancy and has no beneficiaries to receive a survivor’s pension.
Will there be a new withdrawal of AFP funds this 2023?
So far no, because none of the 10 bills in Congress prospered in the Labor and Economy commissions. Similarly, the Executive Branch has not issued any Emergency Decree in this regard and has only presented a proposal for the comprehensive reform of the pension system.
AFP withdrawal: how many have been approved so far?
From April 1, 2020 to the present, six withdrawals of AFP funds were approved due to the bills that were approved in Congress and that sought to address the impacts of the pandemic on the economy of our country.
The first of them established the withdrawal of up to S/2,000 in 2020, the second allowed the release of 25% of the funds and provided a maximum amount of 3 UIT in that same year. Likewise, on April 13, 2020, a new disbursement of S/2,000 was authorized for workers fired due to the perfect suspension and on November 18 of that year, affiliates could withdraw up to 4 UIT of their funds. Finally, in May 2021, an AFP release up to S/17,600 was authorized again and last year, the approved amount was up to S/18,400.
Source: Larepublica
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
