The Peruvian pension system aims to guarantee a pension for workers when they retire. In the country, two options are contemplated, the Pension Normalization Office (ONP) and the Pension Fund Administrators (AFP).
But is affiliation to the ONP or AFP really compulsory? Can companies affiliate you without consent when you sign your first employment contract?
According to Daniel Paniura, labor lawyer at the Philippi Prietocarrizosa Ferrero Du & Uría law firm, everyone with an employment contract must be affiliated with a pension system, either the ONP or the AFP.
“Not affiliating the worker to one of these two systems is a very serious offense. Affiliation to the pension system is mandatory regardless of the term of the employment contract or the modality. The worker freely chooses to be in the AFP or in the ONP, he cannot belong to both systems”he pointed.
Can they affiliate the worker without his consent?
Paniura explained that the AFP does not affiliate workers, who affiliates is the employer by indication of the worker.
“Affiliation is mandatory; however, the worker is free to choose between the ONP and the AFP. If you choose the AFP, and it is your first job, you will be affiliated with the AFP that wins the bidding contest”he pointed.
In December 2020, AFP Integra won the tender called by the Superintendency of Banking, Insurance and AFPs (SBS) to incorporate new members into the private pension system from June 1, 2021 and for a period of two years.
What happens if the worker does not choose between AFP and ONP?
If it is the worker’s first employment relationship, his employer must deliver an informative bulletin in which the worker will be informed about the nature and benefits of each of the systems: AFP and ONP.
Once informed, the worker must indicate to the employer which system he wishes to be affiliated with.
“In case the worker does not express his decision through one of these two systems, the employer must affiliate him to the AFP that won the tender, which is AFP Integra”pointed out the worker.
