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On the last day of the deadline to pronounce, the Executive announced the observance of the law approved by the Congress that allows a new withdrawal for up to S / 17,600 for all affiliates of the AFP.

However, considering the situation of the pandemic and its impact on the household economy, some adjustments to this initiative were proposed to the Legislature in order to give the underlying reason the green light and not affect the “The right to a pension” it is “Distort the private pension system.”

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The first of these is reduce the universe of affiliates who will be able to access this retirement optionally to only those who do not register contributions in the last three months of this year. That is, those who are currently on the payroll will not qualify.

It also specifies that those who are eligible to access the Early Retirement Scheme for Unemployment (NEw).

Another adjustment of the Executive is to eliminate the article that allowed third parties to make withdrawals, referring to the fact that the Congress proposed that beneficiaries of a maintenance obligation by the affiliate can withdraw up to 30% of the potential amount.

The same happened with the provision authorizing the 100% withdrawal of the funds to those who are over 40 years old and have not registered contributions in the last five years.

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David Tuesta, former Minister of Economy and public policy advisor to the AFP Association, considered that the precision of the affiliates who will qualify the new AFP withdrawal it was necessary.

“Amounts had already been withdrawn excessively from the AFPs, approximately 25% of total funds, equivalent to almost 10% of GDP. The amount was quite exaggerated, it was money distributed for 10 waves of infections. The incentive is perverse because it harms those who intend to benefit, in addition to generating intergenerational effects: various children must support their parents ”, Tuesta pointed out.

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Jorge Guillen, Professor of Finance at ESAN, also indicated that the Executive’s proposal is a “padlock” convenient given the uncertainty about the eventual state intervention in these individually funded funds.

“If this adjustment was not made, there would be several outflows of the fund balances due to the fear that exists, due to the political uncertainty”Guillén commented.

The Executive sent an official letter to Congress explaining the reasons why it observed the bill on the withdrawal of up to 4 UITs from the AFPs.  (Photo: Andina)
The Executive sent an official letter to Congress explaining the reasons why it observed the bill on the withdrawal of up to 4 UITs from the AFPs. (Photo: Andina)

In support of the observation, detailed in 34 pages, the Executive explained that to give the green light to the original legislative initiative you would have more than five million accounts with no balances.

Tuesta explained that a universe of almost 9.5 million that existed before the pandemic, to date and considering previous withdrawals, more than 2 million members have no balances in its AFP funds.

Guillén added that the legislative proposal lacked support, since the economically vulnerable among those affiliated to the private pension system only represent 7% of the total and, to date, they have already withdrawn all of their funds.

For its part, Jorge Carrillo Acosta, teacher of Pacific Business School, added that this counterproposal would be covering the universe of workers, since it works as a complement to the authorization of withdrawals of funds from Compensation for length of service (CTS), which was officially published last Friday 23.

“There is a complement. The CTS will provide liquidity on an optional basis to those who today have formal jobs and the AFP to those who are not on the payroll, at least, for three months “, Carrillo explained.

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For Tuesta, however, the Executive had to reduce the amount of S / 17,600 and instead consider an amount related to the minimum wage or the average, in addition to dosing it in parts considering the ravages of the different stages of the pandemic.

“The Executive is giving enough ground. Now him Congress You have among your options to take this proposal or go for the insistence. I believe that if you do not accept this proposal, they would be totally obtuse, because the report is strong with its reasons “, he pointed out.

While Carrillo observed that the Executive’s proposal would fall into “Broken sack”, considering the legislative performance of this Congress.

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