Society

Peru's Congress approved funds withdrawal and second impeachment trial for Vizcarra

It is the second time that both of them occur this year: Vizcarra's impeachment trial and private pension funds withdrawal

FILE PHOTO: Peru's President Martin Vizcarra addresses the nation, as he announces he was dissolving Congress, at the government palace in Lima, Peru September 30, 2019. Peruvian Presidency/Handout via REUTERS
  • President Martín Vizcarra survived an impeachment trial a month and a half earlier;
  • The Peruvian Congress approved a law to enable citizens to withdraw more of their investments in private pension funds to alleviate the economic crisis.

The Peruvian Congress approved on Monday to start a new impeachment case against President Martín Vizcarra over corruption allegations, a month and a half after he survived a similar process by having the majority of votes. Now, the President will have to defend himself in plenary on November 9.

Also on Monday, the Peruvian Congress approved a law to enable citizens of the Andean country to withdraw more of their investments in private pension funds to alleviate the economic crisis caused by the pandemic.

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The law was approved by almost every congressman despite opposition from the government of President Martín Vizcarra. It authorizes the withdrawal of up to PEN 17,200 ($4,765) from the private pension system by members who have not contributed for more than 12 consecutive months.

In April, the Peruvian Congress enacted a similar law allowing people to withdraw up to 25% of their holdings in private pension funds. This law allowed a maximum withdrawal of PEN 12,900 ($ 3,573).

The Ministry of Economy and the Central Bank warned that a second round of withdrawals would affect the solvency of the financial system.

READ ALSO: Peru’s president Vizcarra survives impeachment trial in Congress

Four private pension fund companies operate in Peru. In March, just before the first law was approved, they managed the equivalent of $46 billion.

The funds were forced to liquidate assets in the local and international markets in July to accommodate withdrawals after the first law was approved.

(Translated by LABS)