Congress approves new withdrawal of pension funds: Populism instead of structural reform?

The Congress of the Republic has once again made a decision that has sparked controversy and discontent in various sectors of society. On this occasion, the Economy Committee approved a new withdrawal of funds from the AFPs of up to four UITs (S/20,600), marking the seventh withdrawal since 2020. This measure, which was part of a broader bill that included a comprehensive reform of the pension system, has highlighted the lack of political will to address the necessary structural reforms in the country. The approval of this new withdrawal has been heavily criticized by various institutions such as the Ministry of Economy and Finance, the Central Reserve Bank, and the Superintendence of Banking and Insurance, as well as by specialists in the field. One of the arguments put forward is that, unlike the previous withdrawals authorized in the context of the pandemic, this time it has been justified under the pretext of economic recession, an excuse that many consider unsustainable. Furthermore, the decision to allow anyone with funds in their AFP to access this new withdrawal, regardless of their employment status, has raised suspicions about the true beneficiaries of this measure. According to cited figures, 41% of the amount that could be withdrawn would be concentrated in the population with higher incomes, and 65% would correspond to affiliates who are currently employed, casting doubt on the supposed intention to alleviate the economic situation of those most in need. Most concerning of all is that, once again, a short-term and popular measure has been prioritized over addressing the fundamental problem represented by the pension system in the country. For years, congressmen have chosen to discuss new fund withdrawals instead of focusing on debating and proposing a real reform that guarantees a decent pension for all affiliates in a predominantly informal country with a pension system that has significant deficiencies. It is urgent that government authorities and legislators refocus their efforts on pension system reform before it is too late and the private pension system is further weakened by these populist and short-term decisions. The need for a comprehensive and sustainable reform is pressing, and it is the responsibility of our political representatives to take the necessary measures to ensure the security and well-being of all citizens in their retirement years.