LIMA--Peru's executive branch on Thursday approved a series of
reforms to the nation's private pension-fund system that President
Ollanta Humala's administration says will expand coverage for
residents of this Andean nation.
The prime minister's office said that the law will go into
effect 120 days after the publication of regulations outlining how
the reforms will be implemented.
Congress narrowly approved the bill earlier this month. The
legislation, which has received mixed reviews from the private
sector, was sent to Congress by the Finance Ministry.
Among the measures to increase coverage, the law will require
workers under 40 years old to sign up with a pension fund, while
also requiring independent workers who make more than 1.5 times the
minimum wage to make contributions.
The private pension system, which includes four private pension
funds, was established in 1993 and has registered about 5 million
people.
The pension funds are AFP Horizonte SA (HORIZC1.VL), which is
owned mainly by Holding Continental and Spain's Banco Bilbao
Vizcaya Argentaria SA (BBVA, BBVA.MC); AFP Integra SA
(INTEGRC1.VL), which is owned by Colombia's Grupo de Inversiones
Suramericana SA (GIVSY, GRUPOSURA.BO); AFP Profuturo, whose main
shareholder is a unit of Bank of Nova Scotia (BNS, BNS.T); and
Prima AFP, which is controlled by Peru's Credicorp Ltd. (BAP,
BAP.VL).
Write to Ryan Dube at ryan.dube@dowjones.com
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