Congress approves pension reform project promoted by Fujimorism

With 56 votes in favor, 47 against and 10 abstentions, the Plenary Session of the Congress of the Republic approved in the first vote the replacement text of the Economy Commission referring to the law to modernize the Peruvian Pension System (SPP).

The approved pension reform project, which includes allocating a percentage of the VAT to pension funds, will be the subject of a second vote after seven calendar days.

What does the proposal observed by the Executive branch, which was detached from the seventh AFP withdrawal, include? The law considers four pillars for the administration of funds: contributory, non-contributory, semi-contributory and voluntary.

In the case of the voluntary pillar, a consumption pension is established, which corresponds to 1% of the sum of the value of the payment vouchers issued within each fiscal year, with a limit of 8 UIT per year of total consumption.

A mandatory contribution rate is determined for independent workers, which will be applied gradually as of January 1 of the third year after the entry into force of this law, applying a rate of 2% during said year, the which will increase by one percentage point every two years up to a maximum of 5%.

People over 18 years of age and who have no employment relationship, create an individual consumption pension account in which they accumulate these contributions. People who are affiliated with the SPP accumulate pension contributions for consumption in the CIC that they currently hold.

A minimum pension of S/600 is established for the new system, which must be equated between what the AFP and the ONP once were. In addition, the entry of other actors, such as banks, municipal savings banks and cooperatives, is allowed to open pension accounts.

The new age to access the Special Early Retirement Regime (REJA) in the Private Pension System is 55 years, and no longer 50.