"Constitutional Court ruling ensures retirement rights for ONP members."

The recent decision by the Constitutional Court (TC) of Peru has marked a significant change in the country's pension landscape. After declaring unfounded the unconstitutionality claim presented by the Executive Branch against Law No. 31729, which updates the recognition bonus, members of the National Pension Office (ONP) who migrated to Private Pension Fund Administrators (AFP) since 2002 will not lose their contributions. This resolution has been welcomed with satisfaction by the workers who made the transfer and who, until now, feared losing their savings. Law No. 31729, approved in April 2023 at the insistence of Congress, establishes that members who choose to migrate to the AFP from 2002 onwards have the right to receive a recognition bonus for their contributions prior to the National Pension System (SNP). This represents a crucial change, as until the implementation date of this law, workers who migrated after 2001 were not entitled to such a bonus and, therefore, lost their accumulated savings in the ONP. The TC's ruling, through sentence No. 292-2024, reaffirms that contributors and former contributors who continue migrating to the AFP will see their contributions deposited into their Individual Capitalization Accounts (CIC), thus ensuring that these funds remain safe and accessible for their retirement. The decision, which did not achieve the necessary majority to be declared unconstitutional, is a relief for millions of Peruvians who feared the repercussions of migration. The Executive Branch, which argued that the law did not respect the criterion of financial sustainability and that there was not enough budget to cover the new recognition bonus payments, has found itself in a difficult position following the ruling. Concerns about the possible underfunding of the SNP and the lack of comprehensive reform in the pension system have been central points in the discussion, but the court's decision has dismissed these arguments. Víctorhugo Montoya, head of the ONP, has warned several times that the law could lead to 4.6 million members ceasing to contribute to the SNP. However, this assertion has been met with skepticism by supporters of the law, who argue that the right to a recognition bonus is a fair way to compensate those who have been contributing to the system. The recognition bonus, an economic benefit paid at the time of retirement, thus becomes a central issue for the future of workers who contributed to the SNP before their migration. This resource is seen as a lifeline for many who can now expect a more dignified and secure retirement. Despite the criticisms that have arisen regarding the law, popular support for it has been notable. Many workers have expressed their joy and relief at the news, considering this ruling a victory for their rights. The possibility that their contributions will be recognized and recovered is a fundamental aspect for those who have made decisions about their financial future. This ruling not only impacts current members but also future generations of workers. By ensuring that contributions made to the ONP are not lost in the transition to the AFP, a precedent is established that could influence the way pensions are managed in the country and how workers are viewed within the pension system. With the hope that this decision leads to better management of pension funds and greater respect for citizens' rights, ONP members and supporters of Law No. 31729 are closely watching the government's next steps and potential reforms to the pension system. The future of the Peruvian pension regime may be at stake, and the security of millions of workers' savings depends on how events unfold in the coming months.