AFP Retirement: Congress debates plans to overhaul pension fund

Alex Contreras, head of the MEF, confirmed that efforts to release private funds are populist measures. “I do not work for an AFP, I am an academic who has done his work in the public sector. I am not interested in securing financial stability,” he pointed out.

He said that Peru is the only country in the world that is talking about withdrawing pensions, in a complicated environment. “S/1,000 now is like S/10,000 in 30 years,” he said.

Congressman Isaac Mita criticized Economy Minister Alex Contreras’ presentation because, he said, he had the power to protect the AFP. “You don’t represent the private sector, but the state that pays for your work,” the legislator said.

Fuerza Popular’s congresswoman, Rosangella Barbarán, criticized the government for having promised to send a pension reform proposal to parliament, but so far it has not presented it. He points out the need to discuss approaches such as minimum pension, performance commission etc. in the table along with expanding players in the pension system.

“It is proposed that the AFP is not the only one, because they have abused and proved that they are incompetent. We need new actors, the contributor needs the freedom to decide who is more profitable,” he criticized.

Congressman of popular renewal, Jorge Montoya, referring to a task force created in the previous legislature to strengthen the pension system. “This motion addresses the majority of the people of the country. No one likes to be forced into a discount. It should be voluntary according to income,” he pointed out.

He criticized the AFP withdrawal bills as they continue to emerge with a mixture of populism and ignorance. “The withdrawers are theirs 4 out They are not going to get old age pension anymore, they are wasting their time,” he said.

I heard the basics Economy Minister Alex Contreras, Congressman Ilyich Lopez says withdrawing the AFP will become a cost to families. “They’re going to spend it in no time.” Next, he suggests AFP withdrawals should be used for tangible things like buying a house.

“We will give them the opportunity to use 100% to access a home, not just for current expenses. A large number of citizens in Peru spend on housing rent. “Neither populism nor closed security shuts down the AFP,” the lawmaker said.

Congressman Alejandro Cavero, in line with the Economy Minister’s foundation, says AFP withdrawal will only benefit the rich, not the vulnerable or informal. “Pension funds help fund infrastructure and bonds in our country,” he says, adding that liquidating them is not an option.

Alex Contreras says the people most concerned about the possibility of a new AFP withdrawal are foreign investors who bought Peruvian bonds. “AFPs are losing power and that has affected liquidity.”

“If 100% of pension funds are withdrawn, we will have no buyers of bonds. Investors will stop investing,” he concluded.

Another foundation points out that the biggest impact of the AFP withdrawal will be on high-income and well-earning people. “This is not a move to support the most vulnerable,” he says.

If Congress, because of its independence, decides to approve the withdrawal of the AFP, Contreras Miranda says it should be somewhat more limited. He points out that contributions are mandatory because people are not in the habit of saving.

Alex Contreras, head of the Ministry of Economy and Finance (MEF), comes to the Economic Commission to support his position. “A recent OECD report says that withdrawing the AFP poses a significant threat of poverty in old age, which could turn into a financial risk. “No one can doubt the impartiality of the OECD,” he says.

“The most dramatic part is that 2.3 million members have been left without pension funds. The 6 previous AFP withdrawals were emergency measures. 87 million soles have been extracted,” he pointed out.

Congressman Victor Kutiba (Perú Bicentenario) supports its legislative program, which seeks to recognize members in an unusual way Private pension scheme 3 Withdrawal of funds accumulated in individual capital accounts up to UIT (S/14,850).

“Returning these funds is not unconstitutional. Direct benefits will allow AFP members to use their savings to cover their family expenses,” he said during his presentation. He asked his colleagues to do a “solidarity act” in support of the workers.