Controversy over possible seventh withdrawal of AFP funds: relief or long-term economic harm?

A new withdrawal of funds from the AFPs has sparked controversy in the country, as various experts warn that this measure would primarily benefit a financially non-vulnerable minority, countering the argument that it is a relief for the population in times of crisis. Despite the Private Pension System (SPP) having experienced six extraordinary withdrawals, there are currently at least 28 bills under discussion that seek to allow a seventh withdrawal of funds from the AFPs. However, the concern is that this decision would mainly benefit high-income individuals who have continued to contribute to the system and are not in a situation of economic vulnerability. One of the proposals under debate suggests withdrawing 50% of the fund for mortgage payments in the first year of the norm's validity, favoring contributors who own more than one property. This measure, according to critics, distorts the original purpose of the pension system, which is to ensure savings for the citizens' old age. Congressman José Luna Gálvez has announced that the Congressional Economic Commission will debate and vote on a proposal to withdraw up to S/ 20,600 in an extraordinary session. However, economists like Juan Carlos Odar, managing director of Phase Consultores, point out that the main beneficiaries of these new withdrawals would be high-income individuals with a substantial fund, i.e., those who continue to work without an urgent need for additional resources. During the previous withdrawals, the Superintendence of Banking, Insurance and AFPs (SBS) reported that a significant amount of funds was withdrawn by high-income affiliates who remained employed during the pandemic, reinforcing the idea that these measures are not aimed at the majority of contributors. Furthermore, following the six previous withdrawals, the SBS estimates that over 2.4 million SPP affiliates no longer have funds to withdraw, and the approval of a new withdrawal could increase the number of affiliates with zero balances in their pension accounts to eight million. Experts like Eduardo Jiménez, head of the Macroconsult Information System, warn that a new fund withdrawal would harm all citizens in the long term, as it would affect the financing capacity of long-term investments, negatively impacting the country's economic growth. In summary, the discussion surrounding a seventh withdrawal of funds from the AFPs poses a dilemma between immediate relief for a financially non-vulnerable minority and the long-term negative impact on the economy and the pension future of millions of Peruvians. It is essential to carefully evaluate the implications of this measure before its final approval.