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Withdrawal of 100% of AFP: what do the MEF and the SBS think of this proposal?

Withdrawal of 100% of AFP: what do the MEF and the SBS think of this proposal?

Yesterday, the Minister of Labor Betssy Chávez, in her capacity as congresswoman of the Republic, sent an official letter to the president of the Parliament’s Economy Commission, Silvia Monteza, so that the discussion of the bill of her co-authorship that authorizes the return of 100% of the contributions of the Private Pension System (SPP).

This initiative, which was presented by the congressman of Peru Libre Luis Kamiche on December 9, 2021, is in its study stage by the Economy Commissionwhich has sent official letters to the different specialized public and private entities so that they can analyze the legislative proposal, which is a common practice for preparing the forecast.

Among the institutions consulted, the Superintendence of Banking Insurance and AFPs (SBS), the Presidency of the Council of Ministers (PCM) and the Ministry of Economy and Finance (MEF) stand out.

The PCM sent its response to the Congressional Economy Commission and pointed out that, due to competence, it is not their responsibility to issue an opinion on the parliamentary proposal, and they pointed out that these issues can be dealt with by the MTPE and the MEF.

Meanwhile, the MEF, through the General Directorate of Financial Markets and Private Pensions, gave an unfavorable opinion on the project to release 100% of the AFPs, since “the measure affects the intangibility of social security funds, since pension funds are intended to ensure and guarantee the payment of a pension, not withdrawals prior to retirement”.

Likewise, the entity mentioned that the withdrawal of the proposed pension funds would have an impact on the liquidity of the financial system, since it would generate problems for affiliates in the future.

According to MEF estimates, if the standard is approved, close to 2.7 million affiliates could withdraw the balances of their pension funds for a total amount close to S/ 78,000 millionwhich represents 58% of the value of the pension fund and 32% of the total number of affiliates to the system.

Impact of the withdrawal of 100% of the AFPs. Source: MEF.

On the other hand, the SBS disagreed with the proposal, since they consider that it does not meet the objective of providing adequate protection for the population affiliated with the SPP against the risks of old age, disability and death.

“It generates a greater financial burden on society, because it will have to be this one that provides the resources (via taxes or other means of collection) to finance the protection of those affiliates who decided to withdraw their funds early and, with this, were unprotected at the time of retirement. it too negatively affects spending capacity in other sectors, such as Health and Education”, the entity pointed out.

Other initiatives

The proposal of the bench Free Peru It is not the only one that has been presented, since there are around eight bills in which they request refunds of AFP funds, according to the president of the Economy Commission, Silvia Monteza.

“After the support, a single opinion will be made seeing what is best for the population,” he said a few weeks ago.

Source: Larepublica

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