Peru Authorizes New Pension Fund Withdrawal Due to Pandemic

The law will benefit eight million members of the Private Pension Fund Management System, who will be able to withdraw up to 18,400 soles ($4,800), the government announced.  

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"With this decision, we want to alleviate the economy of thousands of Peruvians who have fundamental needs to cover in health, education, food; or have debts and other obligations to pay," Peruvian President Pedro Castillo, a leftist, said Friday night.

According to the regulation, the affiliates have 90 days to request their money. 

This is the sixth withdrawal of pension funds since the pandemic began in March 2020. The total withdrawn amounts to some 65,923 million soles (about US$17,817 million).

Congress had proposed and approved the rule on May 4, promoted by leftist and rightist legislators.

In April, Peru experienced violent days of protests in rejection of food and fuel price increases.

Inflation has reached figures not seen in more than two decades, 1.48% in March and 0.96% in April. At 12 months, it exceeds 6.82% and it seems certain that it will exceed the 3% target this year.

The private pension fund system was copied from Chile, but unlike the neighboring country, withdrawals have not caused political confrontation in Peru.