Do you know what voluntary contributions are? Although formal workers have their obligatory contributions deducted each month from the AFPbut did you know that there are other ways to make contributions and how profitable they are?
MORE INFORMATION: How can I join an AFP if I am independent?
Members of the Private Pension System (SPP) make monthly contributions in order to save for their retirement. These, which constitute 10% of the worker’s salary, are known as mandatory contributions and are entirely destined to have a pension in old age, explains the AFP Association.
However, in addition to the mandatory contributions, members of the SPP they can make voluntary contributions with a social security purpose and without a social security purpose. Find out what each of these is about below.
WHAT IS THE PROFITABILITY OF THE PRIVATE PENSION SYSTEM?
The profitability of the Private Pension System (SPP) is an average of 11.4% per year.
WHAT ARE THE VOLUNTARY CONTRIBUTIONS FOR PENSION PURPOSES TO THE AFP?
- Voluntary contributions with a provisional purpose are an alternative to increase retirement funds and have the following characteristics.
- They benefit from the profitability generated by the SPP.
- They are unattachable.
- They can be withdrawn at the time of retirement or they can become part of the capital for the calculation of the pension.
- It is contributed in national currency.
- They are subject to charging a commission.
WHO AND HOW CAN MAKE VOLUNTARY CONTRIBUTIONS FOR PENSION PURPOSES TO THE AFP?
The contribution can be made by:
- The dependent worker can make this contribution whenever he wishes by contacting the entity.
- The independent worker can make this contribution in the months in which he makes his mandatory contribution.
WHAT ARE VOLUNTARY CONTRIBUTIONS WITHOUT PENSION END?
- They are a savings or investment alternative and freely available (the member can deposit or withdraw money at any time).
- They benefit from the profitability generated by the Private Pension System.
- There is no minimum contribution amount.
- They are made in national currency.
- They are subject to charging a commission.
- According to law, when withdrawing voluntary contributions without a pension purpose, the capital gain (yield) will be subject to income tax withholding (maximum effective rate of 5% on the generated return). This amount is fully derived to the National Superintendency of Customs and Tax Administration (Sunat).
WHO AND HOW CAN MAKE VOLUNTARY CONTRIBUTIONS WITHOUT PENSION END?
Any affiliate who has been in the Private Pension System (SPP) for a minimum of 5 years or who, alternatively, is over 50 years old, is eligible to make Voluntary Contributions without pension purposes. These can be made and withdrawn at any time and there is no minimum amount.
CAN I MAKE THE VOLUNTARY CONTRIBUTIONS WITHOUT PENSION END IN A DIFFERENT AFP AND IN DIFFERENT FUNDS?
- Members can make voluntary contributions without social security purpose in one or more AFPs other than the AFP where they make their mandatory contributions.
- In addition, members can choose to invest their voluntary contributions without pension purposes in a different type of fund than the one where their mandatory contributions are invested.
WHAT IS THE PRIVATE PENSION SYSTEM?
The Private Pension System (SPP) is a regime managed by private entities called Pension Fund Administrators (AFP), where the contributions made by the worker are registered in a personal account called the Individual Capitalization Account (CIC).
This system was created as an alternative to the pension schemes administered by the Peruvian State and concentrated in the National Pension System (SNP). It was created on December 6, 1992, through Decree Law 25897, and after 25 years, the SPP has more than 7.5 million affiliated people.
