On the verge of resuming the discussion on the pension reform, Congressman Américo Gonza, from the Perú Libre bench, has presented a drastic proposal: eliminate the private system created by Decree Law 25897, which is made up of four Private Fund Administrators Pensions (AFP). These are AFP Integra —which brings together the largest number of affiliates—, Prima Profuturo, Prima AFP and AFP Habitat.
The reasons
According to the initiative, one of the main factors is that the AFPs charge high commissions and provide low profitability, while their profits remain high. In other words, workers see their mandatory pension savings diminished and companies continue to earn regardless of how well or poorly they have invested the money (see infographic).
Of the 8.9 million active affiliates at the end of July 2023, the managed portfolio amounts to S/114,184 million and its profits, discounting taxes, are S/280 million. Fund 0, in which those who are close to retiring are located, registers an accumulated nominal return of 7.65% and fund 1 is at 13.91%, that is, they are showing a recovery compared to their performance in 2022 However, the discontent of the workers continues.
Some users detected that they lost up to 10% of their funds, according to the document presented by the congressman.
On the other hand, it is specified that there is another factor that currently affects workers, and that is that employers are not complying with the payment of contributions. For this reason, there are some 750,000 judicial processes and a debt in the individual capitalization accounts of the affiliates that exceeds S/22,000 million.
100% refund
If this initiative is successful, the total return of the contributions to the workers is contemplated within a period of six months, after the Executive, through the Superintendency of Banking, Insurance and AFP (SBS), regulates the measure.
“It is reasonable to give citizens the opportunity, in a country where the economy of entrepreneurs predominates, to have their contributions. There are even investment products run by financial companies that offer higher returns”, it is stated.
For her part, the representative of the National Association of Contributors and Ex-Contributors of Peru (ANAEA-AFP), Lilia Doris Oria, welcomed Gonza’s initiative, stressing that, in this way, freedom of choice will be guaranteed.
“The way is paved towards true respect for constitutional rights such as the freedom to choose without oligopolies, the true right to property, to create a true pension system to which we are entitled,” he says.
Thus, the ground is being settled so that Congress and the Executive give priority to creating the normative guidelines to reform the pension system, since there are sufficient reasons to affirm that neither the ONP nor the AFP fulfill their objective, that of providing true social protection to the peruvians.
Expectations for a new AFP withdrawal
Congressman José Luna Gálvez (Podemos Peru) has attracted attention on social networks by promoting the following message: “If the return of the AFP is not approved, we will close Congress!”
Gálvez is the author of the eleventh bill to authorize a seventh withdrawal of funds, whose debate and vote must begin in the Economy Commission.
Its president, congressman César Revilla (Popular Force), confirmed to this medium that the proposals will be evaluated, but in a “responsible and technical” way; and he stressed that he will not be guided by media pressure.
Source: Larepublica
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