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22 February, 2023

Peru: The AFP Association presented a reform proposal for the pension system

The AFP Association (AAFP) presented at a press conference a reform proposal for a pension system to guarantee a minimum pension for all Peruvians, highlighting the importance of the private sector in the management of funds and the guidance provided to members. The Association proposes to include independent and informal workers and to improve pensions, since at present time only 3 out of 10 workers will have access to a pension.


The sector’s proposal is based on the following points:


  1. Minimum pension for all. It implements a minimum pension scheme that recognizes and rewards individual effort through solidarity mechanisms.
  2. Matching contribution. It proposes that, for each sol contributed by the member, the State should contribute an equivalent amount until a minimum pension is reached. The purpose of this contribution is to incorporate informal and independent workers who do not have the capacity to save consistently.
  3. Refund of 1% of the Value-Added Tax (VAT). It proposes that each citizen be refunded 1% of the VAT paid during the year, thus increasing pensions and profitability, promoting savings and encouraging formalization.
  4. Seed capital. It implies that the state establishes a fund for each Peruvian born, as a base fund that is capitalized until the retirement age at 65.
  5. Increase the number of fund managers. Affiliates will have more options to choose and open the pension system to new players with the same rules: separate assets and intangible funds for protected the savings.
  6. Finally, the creation of a performance fee, with a component associated to profitability to create a new alternative for members.


With this proposal, the AFP Association efforts to encourage debate that will allow working on a comprehensive reform that will provide decent pensions to all Peruvians.


Download the official press release of the AFP Association


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