Peru Moves to Let Workers Switch Between Public ONP and Private AFP Pensions

Overview

• Law 32123 now allows bidirectional transfers between the national pension office (ONP) and private pension funds (AFP), creating a formal route for contributors to change systems.
• Authorities reported a reglamento has been prepared and the ONP and SBS are building tools and procedures to process transfer requests, but several operational details remain unpublished.
• Key unresolved items include the exact start date for transfers, the conditions and calculation method for a Bono de Reconocimiento for ONP-to-AFP movers, and rules on excluding certain voluntary deposits from AFP-to-ONP transfers.
• Financial outcomes will vary by individual: public ONP guarantees minimum pensions tied to years of contributions while AFP payouts depend on each person’s accumulated balance and investment returns.
• The reform aims to expand coverage and protect low-income retirees, yet experts warn workers with short contribution histories or small AFP balances could still face low pensions and should review options once final rules appear.