Pension reform endorsed by the MEF breaks the locks that govern the current model. Citizens will also be able to choose between insurance companies or financial entities to manage their money.
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The Executive Branch sent to Congress a bill containing its proposal for the reform of the pension system.
Apart from the increase in the minimum, proportional and maximum pension; They will now allow affiliates — both from the public system (ONP) and the private system (AFP) — to move freely between both regimes.
It is worth mentioning that currently a member can leave the National Pension System to go to the private one but at the risk of losing their contributions by not qualifying for the recognition bonus; while the AFP does not let anyone go to the ONP.
According to the document, the pension that a citizen who has accredited 240 units of contributions in the public model would receive in the AFP is not incompatible.
Besides, AFP members will transfer “at any time” as long as 100% of their individual capitalization accounts migrate to the public. The pension to be received will be calculated by taking all your contributions, whether in the ONP or in the private sector.
More competition in the pension system
The entry of financial and insurance entities into the Private Pension Administration System (SPP) is also authorized to compete with the four AFPs.
Affiliates will now be able to choose between an AFP or a banking, financial company, municipal savings and credit — or popular credit —, edipyme, savings and credit cooperative, and rural savings bank.; as well as in an investment bank or a life insurance company.
Source: Larepublica
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