AFP Retirement 2024: who can access this extra money and what are the requirements?

The debate on the bills to authorize a seventh withdrawal from the Pension Fund Administrators (AFP) did not prosper in the Congress of the Republic due to the lack of consensus among parliamentarians from various groups and a new discussion would only restart during the legislature at the end of March.

Despite this situation, AFP members can access various modalities to release their saved money, such as the Early Retirement Regime (REJA), 25% to purchase a property and the law that creates minimum pensions and allows surpluses of private pension funds. Next, we will tell you the benefits of these withdrawal mechanisms and what requirements must be met to request them.

AFP Retirement 2024: what is early retirement?

Since September 1, 2021, Law 31332 came into force, which standardized the age to access early retirement in the Private Pension System. Through this modality, AFP members can request the withdrawal of up to 95.5% of their funds and the remaining 4.5% will remain for coverage for the benefits provided by EsSalud.

In this regard, there are three alternatives to carry out this premature release: ordinary early retirement, for unemployment and for workers who carry out high-risk work. Below, we present the requirements for each of them:

Due to unemployment:

1. Be at least 50 years old when you start the process and less than 65.
2. Being unemployed for a period greater than or equal to 12 months or more, consecutively.
3. Submit an Affidavit of Unemployment Status.
4. Present the document of a certain date that certifies the termination.

By ordinary modality:

• At the time of starting the process, you must be over 50 years old.
• Have 72 months of contributions in the last 120 months prior to requesting the extra benefit.
• Have a pension calculated in the Private Pension System, which must be greater than or equal to 40% of the average of your salaries received and income declared during the last 120 months. That is, in the recent 10 years.

For risky work:

• To access this regime, high-risk work must be carried out such as underground mining extraction activities, open pit, in mining, metallurgical and steel centers that are exposed to toxicity, danger and unhealthiness; as well as works in civil construction, among others.

AFP withdrawal for home purchase: what requirements do they require?

Since July 2016, Law No. 30478 came into force, which empowers members of the Pension Fund Administrators to use up to 25% of their accumulated funds in the Individual Capitalization Accounts (CIC) to pay the initial payment or amortize the mortgage loan of your first property.

It is worth mentioning that this rule does not allow the use of these resources for activities such as renovation, remodeling, expansion, improvement or subdivision of a property or for the consolidation of mortgage debt. Below, find out all the requirements to request this withdrawal method:

• Not having been or being the owner of a property acquired personally.
• Not having been or being the owner of a property under a community partnership regime.
• Not having been or being a co-owner, 50% or more, of a property registered or registrable in the Sunarp Property Registry.
• You must not be the owner, either individually or under a community partnership regime, of a mortgage loan or have the position of co-debtor with a responsibility of 50% or more on a property registered or registrable in the Property Registry of the Sunarp.

How to request the AFP withdrawal to purchase a home?

• Go to the financial institution to apply for the mortgage loan and present the Sunarp Real Estate Index Search document. Then, your order will be evaluated and, if approved, you will be given the pre-conformity document.
• With this document, go to your AFP and request the provision of a percentage of your pension fund (up to 25%). According to this, your AFP will carry out the respective evaluation and, if it is favorable, will send a communication of origin to the financial institution within a period of 10 business days.
• Once said entity has received the disbursement order, the AFP must transfer 25% of the funds to the financial system account. It is important to mention that in the case of two members who are spouses, both may demand 25% of their pension fund, either for the purchase or amortization.

AFP Withdrawal: how to withdraw the surplus from my pension fund?

In accordance with Law No. 31670, the aim is to improve the pension culture through goals for a minimum retirement and promote alternatives for voluntary contributions to the Private Pension System. In this sense, the member can define the amount of the pension to which he will access when he retires, but this must not be less than the basic consumption basket established by the National Institute of Statistics and Informatics.

Similarly, the regulation establishes that the value of the minimum retirement balance will be updated until the moment the member processes his or her retirement and the AFP must periodically inform its users of the pending amount to reach the savings goal.

AFP Retirement 2024: what are the pending bills?

It is important to remember that, before the end of the first semester of the ordinary legislature, a total of 28 bills have been presented to allow AFP members to withdraw money from their Individual Capitalization Accounts (CIC).

Of these legislative initiatives, 12 seek the release of up to 4 UIT, 3 seek to expand the amount for the acquisition of real estate or the payment of debts through a mortgage guarantee, and the majority of the proposals aim for citizens to use their savings to cope with the impacts of the economic recession.

Now, we present a list of all the proposals that have been presented in Congress:

• AFP Withdrawal from 2 UIT (S/10,300) – Segundo Montalvo Cubas (Free Peru)
• AFP withdrawal of up to 4 UIT (S/20,600) – Digna Calle (Vamos Perú)
• AFP withdrawal of up to 3 UIT (S/15,450) – 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/15,450) – Víctor Flores (Fuerza Popular)
• AFP Withdrawal from 5 UIT (S/25,750) – Jaime Quito
• AFP Retirement from 4 UIT (S/20,600) – 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 withdrawal from 4 UIT (S/20,600) – José Luna (Vamos Perú)
• AFP withdrawal from 4 UIT (S/20,600) – Jorge Luis Flores Ancachi (Popular Action)
• AFP withdrawal from 4 UIT (S/20,600) – Kelly Portalatino (Perú Libre)
• AFP withdrawal from 4 UIT (S/20,600) – Luis Aragón (Popular Action)
• AFP Withdrawal from 4 UIT (S/20,600) – Mariza Taipe (Free Peru)
• AFP withdrawal from 4 UIT (S/20,600) – Flavio Cruz (Perú Libre)
• AFP withdrawal of up to 3 UIT (S/14,850) – Edgard Reymundo (Democratic Change-Together for Peru)
• AFP withdrawal from 4 UIT (S/20,600) – José Pazo (Somos Perú)
• AFP withdrawal of 100% of funds in cases of death of the member – Digna Calle (Vamos)
• AFP withdrawal from 4 UIT (S/20,600) – Wilson Quispe (Perú Libre)
• AFP withdrawal from 2 UIT (S/10,300) – César Revilla (Fuerza Popular)
• AFP withdrawal of 90% of funds due to terminal illness – Katy Ugarte (Parliamentary Unity and Dialogue)
• AFP Withdrawal from 1 UIT (S/5,150) – Jeny López (Fuerza Popular)
• AFP retirement in cases of terminal illness or cancer – Germán Tacuri (National Concertation Magisterial Block)
• AFP withdrawal from 4 UIT (S/20,600) – Isabel Cortez
• AFP Retirement of 5 UIT (S/25,750) – Segundo Quiroz (National Concertation Magisterial Block)
• AFP retirement from 4 UIT (S/20,600) – Alfredo Pariona (not grouped).