Concern about possible new withdrawals of funds from AFPs: Impact on pensioners and the economy

The new head of the Ministry of Economy and Finance (MEF), José Arista, has expressed his concern about the possibility of Congress insisting on approving more withdrawals of funds from the AFPs, arguing that this measure not only harms pensioners but also has a negative impact on the economy in general. In an interview with RPP, Arista stated that he believes that the insistence on approving a seventh withdrawal of funds from AFP affiliates is a bad decision, as the majority of pensioners no longer have sufficient savings for their retirement. According to his words, out of 10 pensioners, eight no longer have funds for their old age. These statements arise in response to comments made by César Revilla, President of the Congressional Economic Commission, who has mentioned that there is broad consensus in the political parties to approve a new withdrawal of funds from the AFPs. Revilla has mentioned that in the next legislative term, the debate on pension system reform in Peru will be resumed, which would include the possibility of a withdrawal of up to S/ 20,600 (4 UIT). From 2020 to 2022, six withdrawals of pension funds have been approved for a total amount close to S/ 90 billion, leaving 2.3 million affiliates to the Private Pension System (SPP) with zero soles in their Individual Capitalization Accounts (CIC). Minister Arista has warned that these measures have an impact not only on the affiliates but also on the capital market and the development of bonds in the Peruvian market. Insisting on more AFP withdrawals could have negative consequences in various aspects of the country's economy. Given this scenario, it is important to carefully evaluate the implications of approving new withdrawals of funds from the AFPs, considering not only the immediate impact on pensioners but also on the long-term stability and economic development of the country.