The debate on the 11 legislative proposals to authorize a seventh withdrawal from the Pension Fund Administrators (AFP) has not yet begun in the Congressional Economy Commission and many Peruvians are waiting to know if they will be able to count on a new disbursement. The Ministry of Economy and Finance (MEF) indicated that this measure would cause fiscal risks; while some parliamentarians insist on demanding that the issue be prioritized. We tell you all the details in the following note. Pay attention!
Will there be a new withdrawal of AFP funds in 2023?
No, since, so far, none of the 11 bills in Congress have been debated during this new legislature to become an opinion and allow their subsequent approval in the Plenary. Likewise, the Executive Branch has not published any emergency decree in this regard and has only worked on a proposal to reform the pension system that would be presented at the end of September.
AFP Retreat: what projects have been presented to date?
In total, there are 11 legislative proposals from various congressmen that propose authorizing AFP members to request the withdrawal of their pension funds. 8 of them seek the release of 5 UIT, 4 UIT, 3 UIT, 50% and 70% of the Individual Capitalization Accounts (CIC), while the other 3 are related to increasing the withdrawal amount to buy a property or pay debts through the mortgage guarantee.
The latest bill was presented by parliamentarian José Luna, who seeks to legalize a seventh withdrawal of up to 4 UIT and transfer 100% to pension accounts within the financial savings system, which is the main difference with other legislative initiatives. Below, we present a compilation of all these proposals pending debate in the Economy Commission chaired by the legislator, César Revilla:
- AFP withdrawal of up to 4 UIT (S/19,800) – Digna Calle (Vamos Perú)
- AFP withdrawal of up to 3 UIT (S/14,850) – Víctor Cutipa (Peru Bicentennial)
- AFP withdrawal of 50% of funds – Elías Ávalos (Vamos Perú)
- AFP withdrawal of 70% of funds – Américo Gonza (Perú Libre)
- AFP withdrawal of 50% of funds for home purchase – Patricia Juárez (Fuerza Popular)
- AFP withdrawal from 3 UIT (S/14,850) – Víctor Flores (Fuerza Popular)
- AFP Withdrawal from 5 UIT (S/24,750) – Jaime Quito
- AFP Retirement from 4 UIT (S/19,800) – Guido Bellido (Peru Bicentennial)
- AFP withdrawal of 25% to pay debts with mortgage guarantee – Melissa Córdova (Avanza País)
- AFP withdrawal of 100% for home purchase – Ilich López (Popular Action).
- AFP Retirement from 4 UIT (S/19,800) – José Luna (Vamos Perú)
AFP Retirement 2023: what risks exist according to the MEF?
During his presentation at the Congressional Economy Commission, Minister Alex Contreras said that an eventual seventh withdrawal of the AFP would have a detrimental impact on the efforts being made to reform the Peruvian pension system, which has proposals from both the Executive Branch and Congress.
“With the withdrawal of pensions there are two concerns. In the long term, it means continuing to unprotect retirees. Let us remember that every time there are fewer people who will not have a pension; and that would generate a significant outflow of capital that affects fiscal management, because the AFPs were the main buyers of Treasury bonds.”explained the head of the MEF.
Likewise, he stressed that “fiscal accounts must be taken care of because the State cannot leave many people unprotected.” Along these lines, he highlighted the vulnerability of the older adult population who, compared to young people, have less capacity and productivity to work at the same level.
“Unlike a young person, the elderly do not have all the productivity of working at the same pace, therefore, they generate a risk of poverty. “If Congress reaches a measure, it has to be very limited – for example, those who are unemployed for more than two years – but it means creating a problem in the future, because for every S/1,000 you withdraw you lose S/18,000 in the future.” , he sentenced.
AFP Retirement 2023: what do congressmen think?
José Luna, author of the project that seeks the withdrawal of the 4 UITs from the AFP pension fund, pointed out in the Congressional Economy Commission that if this legislative initiative is not approved, “the political class would turn its back on the needs and demands of the population.” In that sense, he emphasized that this rule will promote economic reactivation, since it will allow liquidity to be injected and help the beneficiaries to meet their urgent needs.
“The families need those 4 UITs, because they are seizing their house, their car; They need to pay for their children’s school, food prices are skyrocketing. In this situation, do you think you can wait until you reach the age of 65 when you now have to pay your children’s school fees? We are going to fight in the streets, the 4UIT. This is crucial for Peruvians”held.
In previous statements to La República, César Revilla pointed out that all the legislative initiatives of congressmen related to the release of the pension fund will be evaluated technically and it will have to be evaluated how many it will benefit.
“We have to evaluate who is going to benefit and how many people in a state of vulnerability the rule is going to help. The debate will include the opinion of the members and we will determine with them the real numbers of beneficiaries and how many have 4 UIT in your accounts to withdraw”he claimed.
Finally, parliamentarian Jaime Quito reported in this medium that projects to withdraw funds from the AFPs must be treated with priority, but within the framework of the debate on the comprehensive reform of the pension system. Likewise, he recalled that there is a minority opinion on this issue that proposes a universal pension model.
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.
