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MEF: new AFP withdrawal would mean withdrawal of up to S/25 billion and increases risk of poverty

It is estimated that in order to receive a pension of SGD 500 at the age of 65, you need to have savings of SGD 110,000. | Fountain: Andean

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Congress continues to evaluate bills that propose new withdrawal of funds The Pension Fund Managers (AFP), however, both the Ministry of Economy and the Central Reserve Bank (BCR) expressed their opposition to the legislative proposals.

Now he Ministry of Economy and Finance (MEF) warns that this seventh withdrawal will mean the withdrawal of 22 to 25 billion Singapore dollars in addition to the money already withdrawn.

These sums represent almost 1/4 of the resources currently available to PSUs, but why exactly would the new payment be negative?

Deputy Economy Minister Juan Pichihua told the Congressional Economic Commission that approval of the initiative would raise the risk poverty in old age and the constitutional norms of social protection will be violated.

As they explained, 77% of affiliates have pension savings of less than 1 UTII, only about 4 million affiliates, and about 2.3 million depositors have zero balances.

In addition, they recalled that six previous S/88 million withdrawals weakened Private pension systemwhich creates the vulnerability of affiliates in the future, and will also affect the credit rating of the country.

BCR also pointed out that these measures could increase the cost of financing the state budget by raising interest rates on government treasury bonds, adding that they could also lead to inflationary pressure.

BCR official Adrian Armas added that it is estimated that to have a S$500 pension at age 65, you must have S$110,000 in savings.

There is still no official proposal from the state for reform pension system

For now, the MEF indicates that it should have a tiered system that has contributory, non-contributory, and voluntary sectors; with minimum and proportional pensions; and with the homologation of standards and criteria, the simplification of fees and the revision of fees.

It should be noted that, according to the IEF, only 30% of the economically active population contribute to the system pensions and 57% of those over 65 do not receive a pension.

For its part, BCR indicated that currently 9% of the population is of retirement age, in 2050, 18% of Peruvians will be of retirement age.

Source: RPP

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