AFP Retirement 2024: what are the 3 modalities to access your money and what requirements do you need to meet?

This month the debate on the seventh withdrawal of the Pension Fund Administrators (AFP) will restart in Congress. In total, there are 28 bills that must be analyzed and ruled by the Economy Commission chaired by parliamentarian César Revilla. However, knowing the positions of the legislators and the entities involved in the discussion, there still does not seem to be a consensus.

Despite this inauspicious situation, there are three modalities for citizens to access their money accumulated in pension funds, such as withdrawing 25% to purchase a property, the Early Retirement Regime (REJA) and the law that provides for a pension. minimum and authorizes the disbursement of AFP surpluses.

These are the 3 AFP withdrawal modalities this 2024

The Pension Fund Administrators (AFP) are entities that were created to manage workers’ contributions in matters of retirement, disability, survival and funeral expenses. The objective is to obtain a return that will serve to multiply investments and then distribute pensions when workers reach retirement age. Currently, there are three mechanisms to withdraw money from pension funds.

AFP Retirement 2024: how to access early retirement?

According to the scope of the Law No. 31332, published on September 1, 2021, a member aged 50 or older can use 95.5% of their funds if they are unemployed for 12 consecutive months. Likewise, the remaining 4.5% will be used to cover the benefits provided by Social Health Security. Next, pay attention to the three modalities that exist to advance retirement:

By ordinary modality

1. Be over 50 years old
2. Have a pension calculated in Private Pension Systemwhich must be greater than or equal to 40% of the average of your remunerations received and income declared during the last 120 months, that is, in the recent 10 years
3. Demonstrate 72 months of contributions in the last 120 months prior to requesting the extra benefit.

Due to unemployment

1. Be at least 50 years old at the time of starting the process and less than 65 years old
2. Being unemployed for 12 months or more, continuously
3. Attach an Affidavit of Unemployment Status
4. Present the document of a certain date that certifies the termination.

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 work in civil construction, among others.
• Said pension will be financed with mandatory contributions, the Recognition Bonus, if any, and the State contribution through the Complementary Recognition Bonus.

These are the AFP withdrawal requirements to buy a home

There is another option available which is the withdrawal of funds for the purchase of a home. According to Law No. 30478, An AFP member can request up to 25% of their pension fund to cover the down payment or amortize the mortgage loan for your first property. Next, we will review the necessary requirements to request this type of disbursement:

• Not having been or being the owner of a property acquired personally
• Not having been or being the owner of a property in a community property 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?

1. Go to the financial institution to request 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.
2. With this document, go to your AFP and request the provision of a percentage of your pension fund (up to 25%). According to this, you 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.
3. Once said entity has received the disbursement order, the AFP You 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?

As a member affiliated with the Private Pension System (SPP), insured people have the possibility of accessing a minimum pension. For this, there are two types of pensions according to Law No. 27617 and Law No. 28991, each of them with specific requirements.

Regarding the law that proposes the creation of minimum pensions and the expansion of voluntary contribution alternatives for AFP members, this seeks to create a better pension culture through the determination of goals with a view to a minimum retirement. Along these lines, the contributor can decide the amount of the pension to which he will access when he reaches the retirement age, but this must not be less than the amount of the basic consumption basket (CBC) determined and published by the National Institute of Statistics and Informatics (INEI).

In addition, the regulation specifies that the value of the minimum retirement salary will be updated until the member processes his or her retirement and the AFP will have to periodically inform its users of the pending amount to reach the savings goal.