AFP 2023 withdrawal: what does the new bill say to withdraw up to S/19,800 and what does the MEF think?

The presentation of a new bill to authorize the withdrawal of up to S/19,800 from the funds of the Pension Fund Administrators (AFP) has generated various reactions. One of them is that of the head of the Ministry of Economy and Finance (MEF), Alex Contreras, who questioned the legislative initiative of congressman José Luna. Next, we will tell you the main scope of this proposal and what the head of the MEF said about it. Take note!

AFP Withdrawal: what is the project to release up to 4 UIT?

With the objective of alleviating the family economy in the context of inflation and economic recession in the country, the legislator of Podemos José Luna entered the documentary process of Congress, on Thursday, August 24, the bill No. 5761. This initiative seeks to authorize the extraordinary and optional disbursement of existing funds in the Individual Capitalization Accounts (CIC) of AFP.

According to this legislative initiative, members of the Private Pension System may alternatively carry out the following actions:

• Optionally withdraw up to 4 tax units (UIT) of the total funds accumulated in their AFP accounts, which is equivalent to S/19,800.
• Optionally transfer 100% of the funds accumulated in your CIC to pension accounts within the financial system.

AFP withdrawal project: what would be the procedure?

Congressman José Luna’s legislative proposal stipulates that affiliates will be able to release their funds, as long as they follow these steps:

• Submit an application remotely, virtually or in person and, only once, within 120 calendar days after the effective date of the operating procedure established for that purpose.
• Payments are made up to the amount of 1 UIT (S/4,950) every 45 calendar days, with the first disbursement being made 30 days after submitting the request to the AFP to which the member belongs.
• In the event that the affiliate seeks to withdraw the funds from his CIC, he may request it only once from his AFP, 10 days before the disbursement.

AFP Withdrawal: transfer of 100% of the funds to accounts within the financial system

It is proposed to modify article 221 of the General Law of the Financial System so that companies in this area can capture not only time deposits, savings and custody, but also pension funds.

If approved, the AFP affiliate may request the transfer of 100% of the funds accumulated in their CIC to pension accounts offered by financial institutions. To do this, they must follow this procedure:

• Submit a request remotely, virtually or in person, and only once, after 90 calendar days after the entry into force of the regulation of the standard.
• The AFPs, within 30 days after submitting the application, must directly transfer all the funds accumulated in the affiliate’s CIC, to the financial system entity chosen by the affiliate.

AFP withdrawal project: what did the Minister of Economy say?

Last Friday, August 25, the Minister of Economy, Alex Contreras, spoke out in rejection of Congressman José Luna’s bill that seeks to authorize the withdrawal of up to S/19,800 from AFP funds. In this sense, the head of the MEF described it as a “populist and anti-technical” measure that could affect retirees in our country.

“Our retirees, as you have seen, require a pension and we are making an effort to raise it because the majority of citizens cannot access it. Nowhere in the world is this measure proposed, which is anti-technical and made sense during the pandemic, where medicines and oxygen had to be bought, but today the scenario is different. A measure of this type is nothing more than populism that will end up affecting our retirees”, he explained.