LatinNews Daily - 07 May 2021

In brief: Peru approves modified pension withdrawal bill

* Peru’s unicameral national congress has approved a bill allowing individuals affiliated with the privately managed pension fund system (AFP) to make a further withdrawal from their private pension pots, despite opposition from President Francisco Sagasti. The congressional vote will authorise individuals to withdraw up to US$4,575 from their retirement savings, to help them weather the economic slump caused by the coronavirus (Covid-19) pandemic. The bill had originally been approved by congress in March, but was vetoed by Sagasti on the grounds that it could cause the pension system to collapse. Whilst Sagasti was unable to prevent the bill’s passage, congress did accept two of his recommendations: the article that would have allowed those over 40 years-old to withdraw 100% of their pension funds was eliminated, as was the article that authorised withdrawals by third parties on behalf of AFP affiliates. The bill was passed with 109 votes in favour, no votes against, and three abstentions. It now returns to Sagasti for promulgation.

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