Economy Minister backs targeted AFP withdrawal: Unemployed can access their pension funds

Minister Alex Contreras presented his reasons against 14 initiatives proposing the withdrawal of the new AFP. Photo: Infobae Composite (Aarón Ramos)/Andina

Today, Wednesday, October 4, the Congressional Economic Commission Submitted for debate for the first time in 2023, it is one of 14 legislative proposals that would see the seventh withdrawal of personal funds from the Superannuation Fund Administrators (AFP).

Alex Contreras, head of the Ministry of Economy and Finance (MEF), pointed out a conclusion during the session, which lasted for about three hours. Approval of withdrawal of AFP This would put the pensions of 1.3 million members over 50 at risk. However, given the opportunity Congress Approves at least one of the programs whose position is limited or in favor of withdrawal of attention in favor of the most affected groups.

Economy Minister, Alex Contreras, presents reasons for not approving AFP withdrawal. | TV Congress

“I think the move is populist and not limited. If we really think about the few people who are currently unemployed, we will be limited within this group. This is the first time that MEF is opening this possibility because we have always been against it, but considering the situation and the political concern. , we will focus on this action; we are always ready to support,” said Contreras Miranda.

Along these lines, he agreed that in complex exceptional circumstances, urgent measures should be taken. Even so, he noted, in general, pensions are not a counter-cyclical mechanism, meaning that it is not common for countries around the world to use their pension funds as a tool when unemployment rises.

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During his presentation, he pointed out that in MEF calculations, the approval to release pension funds would create the possibility of total withdrawal. S/30,000 million, equal to 26% of the amount managed by AFPs. Of this figure, S/21,000 million will be withdrawn by subsidiaries over 40 years old.

He reiterated that the position of the MEF is unanimous Banking and Insurance SupervisionHe Central Reserve Bank And the same OECD“It has done a serious and independent analysis,” he notes.

To date, six AFP withdrawals have been approved, costing 87 million soles. Photo: Infobae/Andina composite

“In a complicated environment, Peru is the only country in the world talking about pension withdrawal. Now S/1,000 is like S/10,000 in 30 years,” he said.

Faced with various criticisms from some parliamentarians who pointed out that he appears to be a representative of financial executives, the head of the MEF, Alex Contreras, said, “I don’t work for the AFP, I’m an academic. I should work in the public sector.”

“The most dramatic part is that 2.3 million members have been left without pension funds. The previous six AFP withdrawals (due to the Covid-19 pandemic) were emergency measures,” he added. Let’s remember that these withdrawals involved the provision of 87 million soles.

Congressman Carlos Anderson questioned the MEF’s denial of fresh withdrawals from private pension funds. | TV Congress

In his speech, the Fuerza Prominent Congresswoman, Rosangela Barbaron, He criticized the government’s delay in sending the pension reform proposal to Parliament, despite its promise. The Orange legislator focused the debate on expanding the number of veterans in the pension system and discussing approaches like minimum pension, performance commission.

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

In response, Contreras Miranda said the executive branch’s pension reform proposal is under discussion by the Vice Ministerial Coordination Committee and is expected to be approved next Monday.

The administration’s proposal is to mandatorily connect those over 18 to the pension system. Photo: Andina

At the end of the session, the head of the aforementioned task force, César Revilla (Fuerza Popular) reminded the minister of his promise that “after Tuesday, you will not send the pension reform plan to be debated in Congress.”

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