AFP withdrawal: 79% of Peruvians who withdrew their funds had a job, according to the IEP

In order to face the difficult economic situation that was experienced in 2020 and 2021 as a result of the pandemic, the Executive Power and the Congress of the Republic authorized five extraordinary withdrawals of the Pension Fund Administrators (AFP).

However, a recent survey conducted by the Institute of Peruvian Studies (IEP) commissioned by the Association of AFPs (AFP), shows that “eight out of 10 respondents were working at the time of making the withdrawals. More than half of those surveyed (59%) worked dependently at the time of retirement, and only 14% did not have a job.

This data shows that these measures, which seriously damaged the pension savings of Peruvians, were not well targeted to help those who needed it most. Rather, they allowed a third of those who withdraw will keep S / 0 in their accounts.

Thus, 2.3 million people were left without retirement savings, according to figures from the Superintendence of Banking and Insurance. None of the retirement laws specify who will look after these people when they reach old age.

Return on funds

The survey also showed an interesting fact behind the willingness to withdraw: 47% of those surveyed think that their pension savings earn less return in the AFP than in another financial instrument.

The truth is that the money in the SPP yields much more for its members than any other option in the financial system: 11.4% annual average for 29 years, a much higher yield than any financial instrument.

That said, for every S/ 3 of a member’s pension fund that has been saving in an AFP since the beginning of the system, S/ 2 correspond to the return generated by the SPP.

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