The Superintendence of Banking, Insurance and AFPs (SBS), as well as the Ministry of Economy and Finance (MEF), rejected bill No. 929, which proposes the withdrawal of 100% of AFP funds, a measure that is being debated in the Economy Commission of the Congress promoted by the Minister of Labor, Betssy Chávez.
The regulator warned that a new withdrawal with the scope of this proposal would generate a potential outflow of retirement resources of S/ 77,869 million, in addition to what has already been withdrawn due to the pandemic, which represents 59% of the value of the pension fund; and that it would allow 2.7 million affiliates to use their pension funds for purposes other than retirement.
Regarding the argument of the bill in the sense that the withdrawal must be given because the economic crisis caused by the pandemic continues, the SBS specified that to mitigate these effects, five pension savings withdrawals have already been made, which generated disbursements for around S/ 65,900 million as of October 31, 2021.
Said withdrawn amount represents 8.1% of the Gross Domestic Product (GDP). “In that sense, measures of this nature have already been adopted that affect the pension fund, in favor of the members of the Private Pension System.”, he narrowed down.
In its technical report, sent to the aforementioned parliamentary working group chaired by legislator Silvia Monteza, the SBS pointed out that it is an obligation of governments to dictate measures that guarantee a sustainable social security system over time. Therefore, he added that the Constitution provides for the protection of the right to social security, collected as a fundamental right of the person.
“This bill contravenes the mandates established in articles 10, 11 and 12 of the Political Constitution of the State, which indicate that the State recognizes the universal and progressive right of every person to social security, guarantees free access to health and pensions”, the document reads.
Similarly, the SBS stated that the legislative initiative does not meet the objective of providing adequate protection against risks of old age, disability and death, because it affects the resources accumulated in the members’ accounts, which must be used exclusively to achieve a retirement pension.
“In the specific case of the measure that allows a new premature withdrawal of pension funds proposed by this bill, it should be noted that this deteriorates pension coverage globally, since it leaves more people without sufficient resources for their old age.”, he explained.
He added that it increases the risk of falling into a situation of poverty in old age, generates a greater financial burden on society, distorts the long-term objective of the pension funds and causes losses in the members’ resources.
This statement comes to light after the MEF, whose head is Óscar Graham, rejected the withdrawal of AFP funds, which is being encouraged by the Minister of Labor, Betssy Chávez, who asked that the issue be prioritized in Congress.