Half a million members preferred to withdraw 95.5% of their AFP rather than a pension

Around half a million AFP members chose to withdraw 95.5% of their pension savings instead of collecting a monthly pension in the Private Pension System (SPP), according to information from the Superintendency of Banking, Insurance and AFP ( SBS) with a cut-off date of July 31.

In this way, the AFP They had to disburse close to S/50,000 million since this facility was introduced in the SPP in 2016.

In detail, more than 70% of affiliates (352,901) who decided to withdraw 95.5% of their AFP did so through early unemployment retirement, also known as REJA.

The requirements to access this benefit are to be at least 50 years old and without a formal employment for a year, which allows the member to decide between receiving a monthly pension according to his accumulated fund during his active working period or having 95.5% of his funds, transferring the other 4.5% to the social security of Essalud.

The other large group (135,180 members) who opted to release their AFP did so through retirement at the legal age, that is, from 65 years of age.

For Aldo Ferrini, CEO of AFP Integra, this preference for the disposition of funds It’s because people are thinking more about the short term than the long term.. Furthermore, he points out that although there is a group that will use this money to invest, there is another no less group, “who would prefer to spend it or invest it in a business that may fail and put their future pension at risk.”

For his part, the ESAN Finance professor, Jorge Guillénindicated that members prefer to withdraw 95.5% because the fund they accumulated will not allow them to have a decent pension for their retirement, so they choose to use this money.

Limit withdrawal

Under this context, the Executive Branch, through its pension reform proposal, seeks to place restrictions on the withdrawal of 95.5% of the AFP.

Thus, it proposes prohibiting this benefit to new members, as well as to those currently registered in the system under 40 years of age. While the members who today belong to the AFP and are over 40 years old could have 95.5% of their funds. However, it is established that the S.B.S. You must implement measures so that this benefit is progressively reduced.

“The proposal considers that for those new members who join after the law comes into force, the withdrawal of 95.5% is not allowed,” explained the Ministry of Economy and Finance (MEF), author of the pension reform project. comprehensive presented to Congress the day before.

Early retirement would be at age 55

The early retirement age is currently 50 years; However, the Government seeks to make it now from the age of 55.

According to the explanatory statement, reducing it to less than 55 years would restrict the possibility of a person, with the physical capacity to work and reintegrate into the working marketcontinue saving for your old agevia mandatory or voluntary contributions.

Regarding the legal retirement age, set at 65 years, it is established that the MEF entrusts an entity with the review and evaluation for the purposes of a progressive adjustment over time of said variable.

Reactions

Aldo Ferrini, CEO of AFP Integra

“More than 92% of the total number of people who decided to make some type of withdrawal at the time of retirement, They opted for a full 95.5% withdrawal. The total amount withdrawn exceeds S/45,000 million.”

Andrés Zacarías, General Director of Financial Markets and Private Pension of the MEF

“What is proposed is that withdrawals of 95.5% be limited for new members and for those who are in the system if they are under 40 years old so that they can build a pension in the future.”