The repayment of the contributions to the pension fund administrators (AFP) aroused high expectations among the citizens. Who can benefit? And what will the conditions be? are some of the questions that Economy Minister Marcelo Montenegro will answer.
The country’s leading economic agency said the AFPs have 3,900 million bolivianos serving 1.4 million people who could benefit from the law and ask for their contributions to be paid back. Faced with this situation, Montenegro indicated that not everyone will be able to withdraw all of their resources.
Although the regulatory ordinance has yet to be awaited, Montenegro announced that only unemployed people can claim reimbursement of their contributions and not those who have a private or public source of employment. However, the possibility of making an exception is seen with people who found a job a month or two ago after becoming unemployed.
“The requirements are specified and detailed in the decree, but at the moment it is certain that those who have a job or those who receive or receive an income will not receive any benefits,” said Montenegro.
The normative proposal also sets out the amounts to which people will have access. In the event that a person’s contributions amount to 100,000 Bolivians, they grant up to 15 percent of their AFPs. If the cumulative total does not reach 100,000 Bolivians, they can be awarded 15,000 Bolivians. In the meantime, those who are 50 years old or older and have up to 10,000 will get all their dues back.
Minister Montenegro reiterated on several occasions that people should carefully analyze their situation to see if it is really worth withdrawing their AFPs. “You have to weigh up whether it is absolutely necessary to withdraw this service because you have to think ahead. Balance the costs and benefits, ”he said.
The bill on the reimbursement of contributions was approved by the House of Representatives last week. The senators are expected to provide the appropriate treatment in the next few days.
Then the Ministry of Economic Affairs has to prepare the regulation so that the population can withdraw their contributions. People are advised to check the amount they have already contributed to the AFPs to know exactly how much they can claim.
Some analysts have expressed concern about this move as it puts the old-age insurance system at risk. Others see the need for a complete readjustment of the pension system and contributions as there are currently people who do not even receive half the minimum wage as retirement and are forced to work informally and at an advanced age.
According to Bruno Rojas, researcher at the Study Center for Labor and Agricultural Development, the repayment of contributions to the AFP can mean that contributors cannot retire or can only retire with a minimum income.
Rojas explains that the contributions are invested and earn interest at 50 percent of the accumulated amount. Withdrawing part of the savings credit reduces the interest income. This can result in the worker retiring with the minimum. He also pointed out that the adoption of the scheme would hide a serious problem, namely that, under current conditions, it would not be able to guarantee a pension that would cover the basic needs of the pensioner.