Peru | Pension reform: the good, the bad and the ugly

The country has been going backwards in pension security. We hope that this law is the beginning of a reversal of this situation and that, finally, responsible solutions are sought to guarantee an adequate level of protection during old age.

Key points

• Key points:
• Congress has just approved the law to reform the pension system. This law contains some aspects that are in line with the general objectives pursued by pension systems: coverage and a level of pensions that contribute to coping with old age. But it also contains elements that could be improved.
• Among the favorable aspects, it is worth highlighting the greater shield so that pension funds are not affected by early withdrawals, although it would be desirable to reinforce the legal locks that guarantee the intangibility of these savings.
• Also positive is the guarantee of a minimum pension and the periodic review of certain parameters such as retirement age.
• On the other hand, two elements could be improved: the regressivity of the “consumption pension” proposal and the evaluation of the fiscal cost of the reform.

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