The Congress is making progress on pension reform with a new four-pillar system.

The full Congress has taken an important step in the pension system reform process in the country by approving in a first vote the substitute text that proposes significant modifications to the current structure. With 56 votes in favor, 47 against, and 10 abstentions, the proposal will now need to be ratified in a second vote within the next seven calendar days. The proposed new system is based on four pillars: non-contributory, semi-contributory, contributory, and voluntary pillar. These pillars aim to ensure greater coverage and a variety of benefits for affiliates, ranging from those currently receiving social assistance programs to those making contributions to the pension system. During the debate in Congress, the president of the Economy Committee, Congressman César Revilla, explained in detail each of the pillars and the benefits they would offer. A highlight is the creation of a minimum pension of S/600 for all affiliates, a benefit that did not exist previously and will be periodically evaluated based on the financial situation of the State and the national economy. One of the most controversial points of the proposal is the inclusion of a consumption-based pension, which would allow affiliates to increase their retirement savings through their daily expenses. However, this measure has sparked disagreements among lawmakers, with criticisms regarding its effectiveness and long-term sustainability. Congressman Jorge Montoya expressed doubts about the feasibility of the consumption-based pension, arguing that it would not benefit the target population and lacks a detailed technical analysis of its fiscal impact. This stance was supported by other legislators who requested a more thorough review of the measure before its final approval. Furthermore, the proposal also establishes contribution rates for both affiliates of the National Pension Office (ONP) and the private system, ensuring a minimum monthly contribution percentage to ensure the long-term sustainability of the system. Regarding withdrawals, any extraordinary withdrawal of the accumulated funds in individual accounts during the active stage of the affiliates has been expressly prohibited, a measure aimed at preserving the integrity and solvency of the pension system. The next step will be the second vote in Congress for the ratification of the pension reform proposal. This process will continue to generate debate and analysis on the implications and benefits that the implementation of this new system will bring, aiming to improve social protection for citizens and guarantee a dignified retirement for all Peruvians.