AFP Withdrawal: Economy Ministry sends report to Congress with four reasons for rejecting fresh fund release of 4 UITs

Ministry of Economy and Finance (MEF), Through the Directorate General of Financial Markets and Private Pensions, the report was sent to the Economic Commission. Congress of the Republic, He agreed to that Infobae PeruThey present an unfavorable opinion to the proposal to withdraw AFP funds up to 4 UIT equivalent to S/20,600.

At the threshold of the debate on pension reform in Peru, a task force led by César Revilla (Fuerza Popular) made the request. MEFHe ordered today Jose Arista, Bill no. Comment on 6566, which allows affiliates to access the seventh financial release.

Noticed hereby vide statement dated 11th March no. The first point of 0042-2024 states that “pension funds are intangible and must include retirement benefits” so they cannot be used for different purposes.

He points out that the move worsens pension coverage because it leaves more people without adequate resources for their old age. In addition, it recommends changes in management Investment portfolios of Administrators of Pension Funds (AFP) In order to increase its liquidity.

This initiative may lead managers to focus on short-term investments that are not consistent with long-term nature, the report said. Retirement portfolio, it will affect Out of the amount raised for providing pension to the members.

Let's remember that between 2020 and 2022, for the first time in an unusual way, various regulations were published that allowed all members. Private pension scheme To withdraw part of their funds in a pandemic environment where severe contraction has occurred Economy Globally and it affected poor countries.

As of December 2022, before the pandemic, as of February 2020, a total of S/87,937 million from the pension fund was equivalent to 51.4%.

Economic Commission Peruvian Congress The year ended without agreement on withdrawal AFP Pension FundAfter a close vote.

With this situation on the horizon, the next session is expected in the month of March 2024. Cesar RevillaA month ago, the head of the commission responsible for the projects indicated that there was a consensus among the committees to approve the pension reform, which includes a withdrawal mechanism of up to 4 tax units (UIT). , S/ 20,600.

In response to the arguments presented, the Directorate General under the Ministry of Economy and Finance for reasons Bill no. Issued unfavorable opinion to 6566/2023:

• This contravenes the provisions of Articles 10, 11 and 12 of the Political Constitution of Peru and represents non-compliance with international treaties on human rights recognized by Peru.
• The withdrawal of funds from the private pension system would mean that the mix of investment portfolios managed by the AFPs would be more illiquid, leading to higher losses in profits, knowing in advance the withdrawal of balances available in the CIC of subsidiaries. Subsidiaries will increase the financing costs of public debt in addition to damages to the Peruvian state.

• This will cause approximately 6 million SPP members to withdraw funds from their CIC, representing a potential exposure of S/29,000 million in resources.
• With regard to OECD recommendations, what was said by the organization was not included in the plan, which is why it could be negative for the country in the process of joining the Organization for Economic Co-operation and Development.

The president of the Economic Commission, Cesar Revilla, assured that “due to problems in power, the discussion on the forecast of the withdrawal of the AFP until 4 UIT could not be held on Wednesday, March 13, despite being on the agenda. Of light.” and Internet Connectivity” in Sansamayo (June), the above working group met in a decentralized manner.

Cesar Revilla Villanueva (Famous Army) Yesterday, after the week of representation that started on March 18, he promised that on Wednesday, March 27, after the week up to Friday, March 18, he plans to discuss the pension reform plan that includes the AFP pension. , March 22.

However, he left open the possibility of moving the date forward if some unforeseen event happened A full session in between.

“The pension reform (which includes AFP retirement) will be officially discussed in the next session. The regular assembly will be held next Wednesday. God willing, we hope they will not schedule any sessions, “We can move it forward to Monday, March 25.” Indian.

In the last presentation of the inflation report, Central Reserve Bank President Julio Velarde promised that any system would be against the approval of the seventh AFP withdrawal. Doesn't have a “high inflationary impact” but will affect pensions in the long run.

“We'll see how it turns out, because so far there is a plan. It's difficult to assess now because we don't know what the norm will be. When it comes out, when it comes out, what will it look like?. How many people depend on it to know when it will be, but in principle we don't believe it will be mostly inflation,” he revealed.

“Any body (is against). It is a pension system, pension is for old people. Everyone ages, make sure of that. I don't know any serious people except a few extreme liberals, but almost everyone believes that the pension system should be maintained. And pensions are very low, indicating that pensions will be even lower,” he said.

From November 2022, members of parliament began tabling legislative proposals to withdraw the seventh AFP. Heading the list of demands are Bench Per Libre and Podemos Peru. Below you will know the total Bills Till date, it has crossed 20 projects.

• AFP Retreat 2 ITU (S/10,300) – Segundo Mondalvo Cubas (Peru Libre), November 18, 2022
• 4 Withdrawal of AFP to UIT (S/20,600) – Digna Calle (Vamos Perú), February 8, 2023
• Withdrawal of AFP up to 3 UIT (S/15,450). — Victor Kutiba (not in group), Feb 7, 2023
• AFP withdraws 50% of funds – Elias Avalos (Vamos Pero), February 8, 2023
• 70% withdrawal of AFP funds – Américo Gonza (Peru Libre), March 3, 2023
• AFP withdraws 50% of funds for house purchases – Patricia Juárez (Fuerza Popular), March 22, 2023
• AFP Retreat 3 ITU (S/15,450) – Víctor Flores (Fuerza Popular), March 23, 2023
• 5 Withdrawal of AFP from UIT (S/25,750) – Jaime Quito (not group), April 26, 2023
• AFP Retreat 4 ITU (S/20,600) – Guido Bellito (Peru Bicentennial), May 16, 2023
• 100% AFP withdrawal for home purchase – Ilich López (not in group), May 23, 2023
• 25% AFP withdrawal to repay loans with mortgage guarantee – Maria Cordova (Avanza País – Social Integration Party), May 23, 2023
• 4 Withdrawal of AFP from UIT (S/20,600) – José Luna (Vamos Perú), August 24, 2023
• AFP Retreat 4 ITU (S/20,600) – Kelly Portalatino (Peru Libre), September 28, 2023
• 4 Withdrawal of AFP from UIT (S/20,600) – Jorge Luis Flores Ancachi (popular action), September 29, 2023
• AFP Retreat 4 ITU (S/20,600) — Luis Aragon (popular act), Oct 6, 2023
• 4 Withdrawal of AFP from UIT (S/20,600) – María Taipe (Perú Libre), October 18, 2023
• AFP Retreat 4 ITU (S/20,600 – Flavio Cruz (Peru Libre), October 24, 2023
• 3 Withdrawal of AFP from UIT (S/15,450) – Edgar Raimundo (Together for Democratic Transition-Peru), November 2, 2023
• AFP Retreat 4 ITU (S/20,600) – Jose Paso (Somos Peru), November 7, 2023
• 100% AFP withdrawal on death of member – Digna Calle (Vamos Perú), November 9, 2023
• AFP Retreat 4 ITU (S/20,600) – Wilson Quispe (Perú Libre), November 17, 2023
• 2 Withdrawal of AFP from UIT (S/10,300) – César Revilla (Fuerza Popular), November 20, 2023
• AFP retreat with 90% funding Due to a life-shortening terminal illness or cancer diagnosis – Katie Ugarte (Parliamentary Unity and Dialogue), November 22, 2023
• 1 Withdrawal of AFP from UIT (S/5,150) – Jeny Lopez (Fuerza Popular), November 23, 2023
• AFP Retreat 5 ITU (S/25,750) – Segundo Quiros (National Concertation Magisterial Block), November 28, 2023
• 50% withdrawal of AFP funding due to terminal illness or cancer diagnosis – Germán Tacuri (National Concertation Magisterial Block), November 28, 2023
• AFP Retreat 4 ITU (S/20,600) – Isabel Cortez (Democratic Transition – Together for Peru), December 1, 2023
• 4 Withdrawal of AFP from UIT (S/20,600) – Alfredo Pariona (not in group), December 12, 2023

Central Reserve Bank President Julio Velarde, by comparison, pointed out that Chile And while contribution rates in European countries are higher than 15%, Peru's percentage is insufficient to guarantee an old-age pension, which is at least 50% of wages earned during working life. World Bank.

“Probably as in Chile, 10% is very low as life expectancy continues to increase. In Chile they raise it to 15%, in Europe they usually exceed 15%, but it's a process and has to be changed little by little. That plan is essential,” he said. Velarde At the first conference in 2024 Inflation report in Peru.