In the latest bulletin of the Superintendence of Banking, Insurance and AFP (SBS) corresponding to June 2023, it is detailed that in the country there are 9 million 057,451 affiliates who have allocated a percentage of their salaries to Private Pension System (SPP)with the purpose of ensuring their retirement, disability or burial.
“In Peru, there are four types of pension funds, each with its own characteristics and investment percentages, of which only three are recommended to invest: funds 1, 2 and 3″explains Antonio Quiroz, professor of the Economics and International Business program at the UPC.
Below, Antonio shares the definition of each of the funds so that you can choose which one to invest in:
Background 1: This fund presents a lower exposure to risk and can invest up to 1% in shares. It is designed for conservative profiles.
Background 2: With a 45% equity investment limit, this fund is suitable for those willing to take a moderate level of risk.
Background 3: With an exposure to shares listed on the capital markets of up to 80%this fund is recommended for young investors with a long-term investment horizon.
Background 0: This fund consists of 100% fixed income, so it is not advisable for investment. It is intended for affiliates who have reached 65 years of age or are close to retiring.
In which pension fund should I invest if I am under 35 years of age?
For affiliates under 35 years of age, with the prospect of contributing for more than 15 years, fund 3 emerges as the most beneficial choice.
“Capital markets tend to maintain a stable behavior in the medium and long term. This fund offers greater growth opportunities compared to the other two. Its greater exposure to shares can generate more attractive growth rates over a longer investment horizon,” says the specialist.
What are the advantages of investing in a pension fund?
Investing in a pension fund entails multiple benefits. Management is governed by rigorous regulations and legal regulations, which provides security to affiliates in terms of protecting their retirement savings. These funds make it possible to take advantage of the experience and knowledge of professional managers in the selection of financial assets that adjust to the investment objectives and risk profile of each member.
If you are under 60, you can change pension funds if you anticipate at least ten years of future contributions. The change is requested through the corresponding AFP, and the process must begin within a period of one month.
Source: Larepublica
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