The law that would allow the extraordinary withdrawal of contributions to the ONP as well as the return of 100% of the contributions for those who failed to deposit for 20 years – which could be approved next week in the plenary session of the Congress– would not solve a fundamental problem in the national pension system.
Oscar Alarcón, president of the National Central of Retirees and Pensioners (Cenajupe), asserts that parliamentarians should aim to give the green light to a rule that allows the minimum benefit for those who contributed only 5, 10 or 15 years.
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Although he pointed out that the reasons behind the law are legitimate in a context of high unemployment and little government assistance, since even 60% of its associates failed to contribute for 20 years and currently do not receive a pension, a law should have been prioritized that eliminate the minimum contribution to the ONP.
“The caucuses are promoting laws motivated by the political campaign and not analyzing the real problem, which is that, in the face of the economic crisis, many others will not be able to complete the 20 years of contributions and will not receive a pension in the future,” he said.
YOU CAN SEE Advances to the full law of withdrawal of contributions to the ONP
Cenajupe’s concern is also supported by the International Labor Organization (ILO). Pablo Casalí, specialist in Social Protection of said organization, opined – in dialogue with the Republic – that there is another institutional space where the debate on pension reform began where the problem of ONP.
“It is precisely in this instance where the need to promote a pension system that guarantees universal coverage, with sufficient benefits, and also reduced benefits for those who cannot accumulate the years of contribution required by law, in line with the ILO Convention 102 on the minimum social security standard, “he said.
YOU CAN SEE Pensioners from Arequipa against the return of contributions to the ONP
For Casalí, he COVID-19It has also revealed the various deficiencies in the social protection system, such as the absence of an unemployment protection mechanism that works as an anti-cyclical policy in the face of an employment crisis of this magnitude, he said.
Inequalities
It should be remembered that, at the end of March, when it was barely a couple of weeks after the start of the quarantine in the country, the government gave two news to the contributors and ex-contributors of the private pension system: the suspension of contributions in April and the withdrawal of up to S / 2,000 for those who had stopped depositing in the previous 12 months. These initiatives sought to alleviate the economic crisis that was already present and that – three months after confinement – is felt even more.
Members of the National Pension System waited for similar announcements. In April, it was the Minister of Economy María Alva who spoke of a subsidy to the contributors of the ONP. But after almost 90 days, the State has not issued any emergency decree in this regard.
This is reflected in the explanatory memorandum of the opinion that the Economic Commission of the Congress approved last Thursday at dawn, and which proposes the return of 100% of contributions to ONP affiliates who are over 55 years of age and have not reached 20 years of contributions (the minimum that it is needed to achieve a monthly pension of S / 500).
The extraordinary withdrawal of up to S / 4,300 is also authorized for active contributors to the ONP.
The initiative – which has the support of the Popular Action, Alliance for Progress as well as Podemos Peru – would have to be financed with more than S / 7,438 million, according to approximate specialists.
YOU CAN SEE Economic Commission approves a ruling to withdraw 100% of ONP funds
According to Anthony Novoa, chairman of the Economic Commission, this amount would be covered with what the contributors to the national system (which total more than 1.2 million) contribute monthly.
However, ONP data reveals that these contributions add up to S / 3,433 million as of the second quarter of 2020. The difference would have to be covered by the Public Treasury.
David Tuesta, former Minister of Economy and who worked in the 2017 Social Protection Commission, maintained that if the opinion were approved in plenary, the law could be declared unconstitutional since the Legislative cannot propose spending initiatives.
YOU CAN SEE Congress: Economic Commission proposes that the return to ONP contributors be only 2,000 soles
But beyond that, he said, the context of the COVID-19 it has made the inequities of both pension systems more evident. “With a AFP that allows individual accounts and does not oblige you to a contribution ceiling, in front of an ONP where you must contribute for 20 years and everything goes to a solidarity fund with which you cover other people’s pensions, ”he asserted.
Thus generating the “injustice” that only members of the private system can access the withdrawal.
“And now these inequities, the Executive, politically, will have to face,” he said.
YOU CAN SEE Congress proposes the return of 100% of contributions to ONP retirees
“A damage control measure that the government could evaluate is to propose a more conservative withdrawal, perhaps a quarter of what Congress is looking for or some specific bond with some criteria could be the exit. But an insistence of the Legislative may end up forcing the Government to apply or accept the rule, “he added.
To date, the ONP has yet to comment on the opinion.
“Economic security must be guaranteed”
According to Pablo Casalí, a Social Protection specialist at the ILO, the rationale for the ruling of the Congress is not discussed as soon as an attempt is made to compensate for the decrease or interruption of workers’ earnings as a result of the pandemic of COVID-19.
However, he also stated that the initiative promoted by various banks could, eventually, jeopardize the sustainability of the national pension system and the payment of benefits to present and future pensioners.
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“If approved, the sustainability of the system will depend on greater assistance from the Public Treasury,” warned Casalí.
For this reason, he reiterated the need to apply other economic measures, such as those that compensate for the lack or reduction of income and active employment policies that allow for a quick job placement, in the face of a crisis context.
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