Start the work life It involves fundamental decisions for the future, including affiliation to a pension system. Having a retirement fund guarantees income at the time of retirement, so it is convenient to start saving from an early age.
In Peru, the private pension system (Spp) allows workers to accumulate a percentage of their income through a pension fund manager (AFP), thus ensuring economic stability after labor cessation. Next, we explain how to join you for the first time.
You started working: How can you first join an AFP?
In this regard, workers can choose between two pension systems: the public and the private. The first is managed by the Office of Pension Standardization (ONP), Where the contributions of all affiliates make up a common fund for the payment of pensions.
On the other hand, the private pension system (Spp) is administered by the AFPs, which assign the contributions to an individual capitalization account (CIC). Unlike the state system, money in this account is personal and generates profitability over time. According to the AFP Association (AAFP), in the last 31 years, the SPP has granted an average nominal profitability of 10% per year.
Those who enter the payroll for the first time are affiliated with their employer, who enrolls the worker in the pension system of their choice.
What is the AFP assigned to the new affiliates?
Currently, there are four AFP in the country: Habitat, Integra, Premium and Profuturo. Every two years, a tender is carried out to determine which will receive the new affiliates. The selected entity is one that offers the lowest annual balance on balance.
Until May, new affiliates are registered in AFP integ. However, as of June 1, they will be assigned to Profuturo AFP, which won the last tender with a 0.68%commission. After two years of permanence in this entity, workers can change to another AFP if they wish.
AFPs offer four types of fund: 0, 1, 2 and 3, each with different levels of profitability and risk. By default, affiliates begin in Fund 2, although they can opt for another at any time.
AFP system operation
The AFP manage pension funds with the purpose of growing in the long term. To do this, each worker makes monthly contributions equivalent to 10% of their salary, which are deposited in their CIC.
Additionally, 1.37% is discounted for disability insurance, survival and funeral expenses, whose administration corresponds to an insurer. Finally, a commission is applied, whose percentage varies according to the AFP chosen.
How does money be invested in an AFP?
AFPs seek to maximize the profitability of funds through a diversified investment portfolio. This process allows accumulated contributions to increase their value over time, ensuring a better pension at the time of retirement.
Source: Larepublica
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