Julio Velarde on pensions: "The cast system no longer gives"

The president of the Central Reserve Bank (BCR), Julio Velardespoke about him pension system In Peru and assured that the distribution modality, which currently uses the ONP, is not viable.

Superintendency presents a project for the entry of institutions such as pension fund managing companies.

“There has to be a pension system, that is indispensable and the truth that the best system in a population that will be decreasing is the individual accounts. The cast system no longer gives. The distribution system occurred in the 19th century when there were many young people and few old people, now it is the other way around,” he said during his participation in the Congress Economy Commission.

He also noted that there must be “less and less children per family.” In Peru, he said, there are 1.8 children per woman, so “thinking that they can keep parents, it is increasingly difficult.” “We are going to have the misfortune of being old before being rich,” he added.

“How did the market affected (the retirement)? We have the treasure bonus that reached 5.7%, it was announced that there were going to be new withdrawals and uploaded 5.9% the rate and rate of the 10 -year bonus is what marks the mortgage rate. Why am I going to lend to ‘Juan Perez’ for a mortgage, if I can buy a bonus at such a rate? In the long term of the companies there are no longer, it emits only in the short term because there is no longer the great buyer that are the AFPs, “he said.

The head of the BCR highlighted the importance of contributing for retirement because “a problem that arises is that people do not save.” “They are always optimistic that they will save later or believe that in a business they will do well, but the truth is that half of the small businesses break before the age of five,” he said.

Rates

A rule approved by the Congress that has also been questioned was the Bumper to interest rateson which Julio Velarde indicated that he has not had any impact on loans to people, so he considered that it is “an almost useless measure.”

“The main problem of interest rates is that it starts from an idea that the financial institution” A “is going to lend to a lower rate. He does not lend him, that is, he has not won anything. Mrs. Gonzales who wanted him to give him the loan simply do not lend him,” he said.

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