Various congressmen have been presenting bills to authorize formal workers to withdraw 100% of the amount corresponding to Compensation for Time of Service (CTS). This time, parliamentarian Segundo Montalvo of Perú Libre entered into documentary processing a new legislative initiative that seeks to extend until 2025 the deadline for citizens to have this money.
Montalvo’s project joins others in the Legislative power, including a replacement text that was approved in the Labor Commission in November of last year. As recalled, a rule approved during the COVID-19 pandemic allowed the release of 100% of the CTS to be viable until December 31, 2023. However, since there is no extension, intangibility returns from 2024 of this benefit, up to the equivalent of 4 worker salaries.
CTS withdrawal: what does the project consist of to have 100% available until 2025?
Last Wednesday, February 21, Congressman Segundo Montalvo presented Bill No. 7089/2023-CR that empowers workers, exceptionally, to use all CTS deposits until December 31, 2025. This legislative proposal pursues the objective of providing financial relief to the population to cover the increase in the basic family basket.
“Taking into account that our country has been going through inflation, recession and low economic growth, with workers in general being the affected ones, it is therefore of utmost importance that this Bill be legislated urgently, which proposes exceptionally authorizing the withdrawal of one hundred percent (100%) of the Compensation for Time of Service (CTS) that is deposited in banking and financial entities, a withdrawal that will be made until December 31, 2025”, reads the explanatory statement of said initiative.
Likewise, article 2 of the Montalvo project indicates that the beneficiaries will be the workers included within the scope of the Single Ordered Text of Legislative Decree 650, Law on Compensation for Time of Service. Finally, in its complementary provision, it establishes that the Executive Branch will dictate the regulatory provisions within a maximum period of 10 days from the entry into force of the norm.
What other proposals are there regarding CTS retirement until 2025?
In addition to bill no. 7089/2023-CR, There is another similar legislative initiative that was presented by Congressman Luis Aragón, from Acción Popular, in October 2023, which aims to extend until 2025 the possibility for workers to have 100% of their Compensation for Time of Service (CTS). and are entitled to withdraw up to 4 UIT of the funds accumulated in their AFP.
It is worth mentioning that recently the parliamentarian Edgard Reymundo of Democratic Change-Together for Peru, entered into documentary processing a bill to authorize the availability of the CTS until December 31, 2024. However, Raúl Doroteo of AP was the first to present the proposal in 2024 to prolong the release of this social benefit that has been underway for 4 years, and now, thanks to Segundo Montalvo’s initiative, it seeks to extend it until the end of 2025.
What is the opinion of the Labor Commission on the CTS withdrawal about?
In November of last year, the Congressional Labor Commission approved an opinion that proposes extending the validity of the 100% withdrawal of the CTS until December 31, 2024. Said substitute text accumulates the bills no. 5009-22-CR, 5185-22-CR and 5311-22-CR of the parliamentarians Jorge Flores (Popular Action), Alejandro Soto (Alianza Para el Progreso) and Flavio Cruz ( Free Peru).
On the other hand, the Ministry of Labor and the Superintendency of Banking, Insurance and AFP (SBS) have expressed their position in rejection of this ruling because it would be distorting the objective of this employment benefit; since it is a precautionary mechanism in the event of any contingency situation resulting from layoffs or termination. This legislative proposal is ready for debate in the Plenary Session of Congress, whose legislature restarts in March.
When is the CTS 2024 deposit?
According to the information provided by the National Superintendency of Labor Supervision (Sunafil), the Compensation for Time of Service is deposited within the first 15 days in May and November of this year, whose semiannual period is as follows:
- From November 1 to April 30: May deposit.
- From May 1 to October 31: November deposit.
What is CTS and what is it for?
Compensation for Time of Service is a payment that employers make to their payroll workers to protect them in the event of dismissal or resignation. This work benefit is deposited twice a year, in April and November.
All formal workers who belong to a company’s payroll will be able to have their Compensation for Time of Service (CTS) deposited as part of the first payment of the semester.
Source: Larepublica
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