Is the withdrawal of AFP on the agenda of the new Economy Commission? This is what congressmen say

The Economy, Banking and Finance Commission of the Congress of the Republic was installed on Wednesday, August 16, and elected parliamentarian César Revilla as its new president for the 2023-2024 legislature. One of the pending issues that this working group must address is the withdrawal of funds from the AFPs, which could not be ruled on in the previous period. Next, find out what legislators think about it and what is the status of the bills that have been presented to date.

AFP Retirement 2023: what are the projections in the new Economy Commission?

For the 2023-2024 ordinary legislature, the Board of Directors of the Congressional Economic Commission will be made up of César Revilla (Popular Force), who assumed the presidency; Segundo Montalvo (Perú Libre) as vice president and Alejandro Cavero (Avanza País) as secretary.

During the installation session of said working group, one of the first to pronounce on the withdrawal of funds from the AFPs was parliamentarian Américo Gonza of Peru Libre, who moved the demand of various groups of citizens to prioritize this issue.

“We have all been approached by citizen groups that are claiming a very important issue regarding the AFPs. Millions await a new retirement in the face of the economic crisis and natural phenomena because their only hope is the savings they have and by the way, before they are finished losing because each month, instead of increasing, they decrease. We must go for a reform of the pension system and if they talk about liberalism, allow affiliates to choose,” he said.

For his part, congressman Jaime Quito indicated in statements to La República that the withdrawal of funds from the AFPs should be treated as a priority, but within the framework of the debate on the comprehensive reform of the pension system. In this sense, he recalled that during the last legislature he presented a minority opinion on this issue that proposes a universal pension model with three levels.

“The Constitutional Court has already established this differentiation, validating the laws of previous withdrawals in the AFPs. Now, I believe that the issue should be dealt with as a priority, but within the framework of the debate on the total reform of the pension system. I do not agree with the opinion of the Economic Commission that would mean the disappearance of the ONP. For this reason, I have proposed a minority opinion based on my bill 3230 —which will also be debated in plenary— which proposes a universal pension system with 3 levels to guarantee the right to a pension,” he said.

Finally, parliamentarian Carlos Anderson told this medium that the 6 withdrawals from the AFPs were made in exceptional circumstances and what is currently needed is to reformulate the entire pension system. Along these lines, he considered that retirement savings for Peruvians should not be mandatory.

“That it is a subject of discussion (withdrawal from AFP) is part of the problem and in general, the entire pension system must be reformulated. It is not a matter of moving the pieces, but a systemic problem. I think we need a free pension system that responds to each person’s circumstances and decisions,” he said.

AFP Retirement 2023: what do congressmen think about the Executive Branch’s proposal?

The Ministry of Economy and Finance (MEF) pre-published a few days ago the proposal of the Multisectoral Commission in charge of evaluating the pension system in Peru, which includes the prohibition of optional and extraordinary withdrawals from the AFPs to avoid distorting pension savings In our country.

With this initiative, the release of funds from the pension fund administrators could only occur in 2 situations: if it is used as an initial fee or to repay a mortgage loan for a first property or if the affiliate suffers from a terminal illness or presents a diagnosis of cancer that reduces their life expectancy and has no beneficiaries to receive a survivor’s pension.

For congressman Jaime Quito, the proposal of the Executive Branch “seeks to rescue the AFPs from their failure and the universalization of the pension will not be possible if contributions from employers are not incorporated or other additional sources are generated.”

“I advocate a transformation of the public sector as a guarantee of access to pensions, in these conditions there would be no reason to withdraw contributions. What Congress and the Executive must do is comply with the ruling of the TC that orders them to increase the amounts of the pensions in the ONP, we consider that the minimum pensions should be equivalent to the minimum wage,” he explained.

For his part, legislator Carlos Anderson pointed out that the document proposed by the Ministry of Economy and Finance “is not a reform because it means substantially changing the way the pension system is organized.”

Withdrawal AFP 2023: what is the situation of the bills in Congress?

7 months have passed since congresswoman Digna Calle from Podemos Peru presented bill 4201 so that affiliates of pension fund administrators (AFPs) can withdraw up to S/19,800 (4 UIT) from their retirement accounts. Since then, 9 additional legislative initiatives have been presented, of which 6 refer to the release of 5 UIT, 4 UIT, 3 UIT, 50% and 70% with the objective that contributors face the impacts of rising prices. of the basic family basket.

The remaining 3 proposals seek to increase the amount of the withdrawal to acquire a property or pay debts through the mortgage guarantee. Of all of them, only the PL of congressman Ilich López of Acción Popular proposes the release of 100% to buy a house. Next, we review all the proposals for regulations that have been presented and that could not be ruled on by the Economy Commission:

• 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).