July 20 (Bloomberg) -- Peru’s government will send Congress a bill next month that seeks to create “investment alternatives” for private pension funds, Finance Minister Miguel Castilla said.
The capital markets initiative will go hand-in-hand with a pension overhaul that will add about 1.9 million new pension affiliates by lowering fees, Castilla said. The Constitutional Tribunal, Peru’s highest court, will rule on a challenge to the pension legislation by opposition lawmakers, he said.
The bill “expands the range of investment alternatives” and “will be presented to Congress in its next session,” Castilla said today at a press conference in Lima. He did not offer further details about the legislation.
President Ollanta Humala won elections a year ago pledging to give the poorest Peruvians a state pension and reduce fees charged by the country’s four private pension administrators. The first overhaul of the private pension system created 19 years ago will boost competition and cut fees by about 30 percent, Castilla told Congress June 5.
Peru’s private pension system has 90 billion soles ($34 billion) in assets under management, according to the Andean nation’s financial regulator. Fund managers have 5 million customers, of which 40 percent, or 2.2 million, are actively contributing.
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