Peru's SBS Proposes New Rules for Pension Fund Migrations
Peru's Superintendencia de Banca, Seguros y AFP (SBS) has published a draft regulation to comply with Law No. 32123, which modernizes the Integrated Pension System. This new procedure will allow members of the Private Pension System (SPP) who currently pay a commission based on their salary, also known as a flow commission, to switch to a balance-based commission system if they choose. The regulation aims to provide greater flexibility and choice for pension fund affiliates. The SBS is seeking public input on this proposed change. This initiative is part of a broader effort to update and improve the country's pension framework, ensuring it remains relevant and effective for its participants.
This regulatory proposal from Peru's SBS reflects a global trend toward offering more diversified fee structures within pension systems. By allowing a migration from salary-based to balance-based commissions, the SPP is potentially enhancing member choice and aligning incentives more closely with long-term fund growth. Such a shift could lead to greater transparency and potentially lower costs for members, particularly those whose salaries fluctuate or who are in later stages of their careers. However, the long-term impact on fund management incentives and overall system sustainability will depend on the specific details of the commission calculation and the market response. This move could also influence how other pension systems in the region approach fee modernization in the coming years.
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