Pension system reform: Congress extends the life of the AFPs

With only 38 votes in favor, the Plenary Session of Congress approved the reform of the pension system in a second vote. The debate lasted just a few minutes and ended with a handful of parliamentarians – barely 10, who rejected it – protesting.

Flavio Cruz (Perú Libre) raised a previous question for the opinion to return to the Economy Commission, but it was unsuccessful. Legislators of various political stripes, such as Jorge Montoya (HyD), assure that the reform is neither fair nor efficient, since it ignores the informal workers and offers “little or nothing” to ONP pensioners, in addition to bringing a high fiscal cost. .

For her part, Sigrid Bazán (CD-JP) commented to this newspaper that the reform was approved with ““ghost congressmen” and without respecting the regulations, and without debate, since “they play with the pensions of all Peruvians by giving them to the AFPs.” At the close of this note, the annulment of the vote at the Board of Spokespersons was raised.

As La República warned, the reform – defended by Keiko Fujimori and the AFP – establishes a pension for consumption, composed of 1% of electronic receipts for purchases of up to S/700 or S/41,200 per year, and even then, only It would generate a complementary pension, in the best of cases, of S/103 after 30 years of contributions. It does not consider, for example, that basic basket products are free of VAT or that informal workers buy in markets that do not issue receipts. The AFP They will manage these accounts and may charge a commission.

Congressional sources maintain for La República that the measure approved yesterday leaves out 7 out of 10 workers, given that only 3 out of 10 contribute to a pension system. It is worth noting that according to the AFP, the total contributors are 5 million 273,226 by 2023; and also considering the ONP, there are 6 million 923,000: 4 out of every 10 belongs to a regime, but does not necessarily contribute.

And, regarding the minimum pension, one of S/600 is set for those who have made at least 240 contribution units and who have not withdrawn their savings from the AFPs. Here and for the proportional ones, if the AFP could not cover them, the State will assume the costs.

“Far from being a reform”

Approach. Noelia Bernal, professor of Economics at UP

The AFPs lost money with authorized withdrawals in recent years, and now, with the approved reform, money will be made easier for them with the consumption pension. For every million workers that apply, son S/412 million that will no longer be collected in VAT taxes. If we estimate that half of the population will benefit, that is two points of GDP that will go out of the Public Treasury, and it is a population with much more advantage than the vulnerable. It will be like a budget item from the Public Treasury to the AFPs. No country in the world has a system like this.

Furthermore, it is not an incentive to save, but rather to consume. No serious economist can defend this project. There is no social security or improvement of the system. We must opt ​​for insurance that benefits everyone. For example, for older adults, go all-in on Pensión 65. Fiscally it does not cost much money. Just 0.15% of GDP. They must be the priority. S/125 a month is not enough.