- If passed, bill would wipe out funds for retirees, Bayly says
- Company proposes changes to pension system after elections
A proposal by Peruvian lawmakers to grant workers unrestricted access to their private pension fund upon retirement would wipe out savings and put a strain on the national budget if passed by Congress, according to Peru’s biggest financial services company.
“It’s extremely dangerous and very irresponsible to make such a radical change so rashly,” Walter Bayly, the chief operating officer of Credicorp Ltd, which owns Peru’s second-largest pension fund, told reporters in Lima.
The congressional panel on economy and finance approved a bill last week that would allow retirees to withdraw up to 95.5 percent of their savings. The bill has yet to be debated on the floor of Congress. Bayly said while he’s in favor of workers having easier access to their savings, changes to the private pension system should be made on technical grounds and in consultation with regulators, after next year’s presidential and parliamentary elections.
“We’re asking politicians to show maturity and not use the pensions of retirees for political gain,” Bayly said.
Credicorp’s proposals for the private pension system include allowing workers full access to their savings only when they total less than 50,000 soles upon retirement or in the case of terminal illness. Bayly said 20 percent of pensions savings could also be used as a guarantee for down payments on mortgage loans.
He also proposed lowering the barriers to entry for new pension fund companies and allowing all Peruvian lenders to offer pension products.