Workers under 40 years of age will not be able to withdraw 95.5% of their AFP, according to the pension reform of Congress

There remains one week for the course of the opinion on the reform of the pension system promoted by Fuerza Popular to be decided. The legislative proposal was approved by a majority last Thursday, May 30, in the Plenary Session of Congress and must undergo a second vote for its scope to become effective.

One of them is the creation of a consumption pension based on contributions of up to 1% of the General Sales Tax (IGV). In addition, the raising of the early retirement age from 50 to 55 years, the obligation of people over 18 years of age to open a retirement account, among other changes, is proposed. However, there is a provision that will affect those under 40 years of age who seek to withdraw their AFP funds.

They limit AFP withdrawal to those under 40 years of age, according to pension reform

With 65 votes in favor, 47 against and 10 abstentions, the Plenary Session of Congress approved the opinion of the Economy Commission that proposes the modernization of the Peruvian pension system. Said legislative proposal is pending a second vote, which must be carried out in the next seven calendar days.

The central objective of the controversial pension reform is to progressively increase the coverage of affiliates through a multi-pillar structure that articulates public and private administration. However, during the debate, the text of this opinion underwent various modifications by detaching the seventh withdrawal from the pension funds and collecting the contributions of the entities competent in economic matters.

In addition to establishing a minimum pension of S/600 for new contributors, raising the age to access the Special Early Retirement Regime from 50 to 55 years, creating a consumption pension that consists of 1% of annual purchases for up to 8 ITU (S/41,200), among other things, this opinion raises a limitation on the availability of resources from individual capitalization accounts (CIC) for people under 40 years of age.

According to the fifteenth final complementary provision of the text approved by the majority of parliamentarians, only “People affiliated with the Private Pension System (SPP) who are 40 years old or older prior to the entry into force of the law, may choose between receiving the pension that corresponds to them in any retirement mode or requesting delivery from the AFP. of up to 95.5% of the total fund available in your Individual Capitalization Account (CIC) for mandatory contributions, in the amounts you consider necessary.

This means that Persons affiliated with the SPP under 40 years of age will not have access to the withdrawal of AFP funds from the entry into force of the law, according to the provisions of the twenty-fourth final and transitional provision of the Single Ordered Text of the Private System Law. of Pensions.

AFP withdrawals prohibited in pension reform

Another of the modifications proposed by Congress to reform the pension system is the prohibition of total or partial withdrawal of AFP funds. Despite having separated this issue a few months ago to expedite the approval of a seventh disbursement, a lock is now established that will limit affiliates’ access to these amounts.

“As of the entry into force of this law, the total or partial withdrawal of the funds accumulated in the individual accounts of mandatory contributions by SPP members is prohibited, except as stipulated in articles 40 and 42. A of the Single Ordered Text of the Law of the Private Pension Fund Administration System, approved by Supreme Decree No. 054-97-EF.

This exception established by the reform approved in the first vote refers to the payment of the initial payment for the purchase of a first property, amortizing a mortgage loan, in cases of early retirement or return of contributions due to a terminal illness or cancer diagnosis.