Today the deadline to withdraw 100% of the CTS ends

This December 31 concludes the period for the total and free release of 100% of the Compensation for Time of Service (CTS), enabled under Law 31480 and intended to cover the economic needs derived from the COVID-19 pandemic. COVID-19.

In this context, on November 7, the Labor and Social Security Commission approved the replacement text, which combines bills 5009-22-CR, 5185-22-CR and 5311-22-CR, and proposes extending the temporary availability of these deposits until December 31, 2024.

The authors of the PL were the congressmen Jorge Flores AncachiAlejandro Soto and Flavio Cruz.

However, despite the approval, the proposal has not yet been debated in the Plenary Session of Congress.

Pasión Dávila, president of said commission, indicated to La República that there are currently 20 projects submitted without debate from his office, and that expects the Board of Spokespersons to prioritize the CTS in the first months of 2024.

“It does not represent an impact on the budget, given that these funds are already determined in the individual accounts of each worker, therefore, the Permanent Commission must schedule it for January or February,” he stated.

Likewise, he emphasized that the decision to withdraw is voluntary and depends mainly on the person themselves. worker.

Reactions

For their part, the Ministry of Labor and Employment Promotion (MTPE) and the Superintendency of Banking, Insurance and AFP (SBS) have opposed this initiative, arguing that it “denaturalizes” the objective of the CTSwhich is a social security benefit that acts as “unemployment insurance” in the event of a possible job dismissal.

In turn, the General Confederation of Workers of Peru (CGTP) also opposed the measure, since it could threaten the safety of workers.

In contrast, the Confederation of Workers of Peru (CTP) has expressed its support, mainly because it could represent a momentary option to face the economic crisis and recession that affect citizens.

Cost effectiveness

It is important to mention that so far this year, interest rates on CTS deposits have fallen and are lower compared to fixed-term deposits.

Only for November, according to information from SBS, Banks reported an average annual rate for time deposits of 6.63%, while the CTS registered only 2.02%. On the other hand, in the case of municipal savings banks, it reached 7.31% in the first case and 5.51% in the second.

Jorge Luis Ojeda, professor of finance at the UPC, pointed out that the profitability of the CTS experienced a sharp drop after the 100% withdrawals were approved, given that financial entities used to consider them as intangible funds, and they became volatile in nature. and in the short term.

Along these lines, he also specified that interest rates in the market In general, they will begin to decrease in the coming months.

“If a person withdraws their CTS and places it for a fixed term, after 180 days the rates could begin to decrease,” he explained in dialogue with this medium.

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In addition, recommended that users search within the financial system for an entity to pay the maximum possible rate for the CTS.

The word

Pasión Dávila, president of the Labor and Social Security Commission

“We consider that this bill for the 100% withdrawal of the CTS by 2024 should have already been given because we are in difficult times of crisis and economic recession.”

Keys

• Answer. Given a possible approval of the withdrawal of 100% of the CTS by 2024, the Executive has the power to observe the norm in 15 days.
• Other projects. At the end of November, Congressman Jorge Coayla Juárez presented a new PL for free withdrawal of CTS until December 31, 2024, with the objective that workers can cover the economic needs caused by the recession.