Second withdrawal of 10%: Congress dispatches the project and AFP get ready to start receiving applications next week

An intense day was lived this Thursday in the Chamber and the Senate for the government’s project to withdraw another 10% of the AFPs, which was finally dismissed from Congress.

Despite the fact that some procedures are still missing to make it law – the Comptroller’s reasoning, promulgation, and publication in the Official Gazette – the AFPs are preparing to start receiving applications as soon as Monday, December 7, but that would happen only if the project is published that day in the Official Gazette.

In any case, between this Friday and the weekend, the AFPs should begin to inform members of the amount they can withdraw.

The dispatch of the project to Congress occurred after several procedures that were carried out yesterday both in the Chamber of Deputies and in the Senate. In the morning it was approved by the Finance Commission of the Chamber of Deputies, and it was sent to the courtroom without changes with respect to what was approved the day before in the Labor Commission.

Later, the initiative was approved in the Chamber of Deputies with 131 votes in favor, 12 against and two abstentions. In this way, the bill was sent to the Senate again without changes.

Then, the Senate Finance Committee had to vote on the modification made by the Chamber of Deputies on taxes, and the parliamentarians approved it, also without modifications: income of up to $ 1.5 million will be exempt from paying taxes when withdrawing.

Thus, the initiative was dispatched to the upper house, and during the night of this Thursday, the Senate approved the modifications made by the Chamber, by 41 votes in favor, and 1 abstention.

But the day was not without controversy, mainly for two reasons: the government’s failure to raise the payment term; and then the vote in the Senate room was delayed, because the parliamentarians realized that the House approved an issue that was not consulted with the Supreme Court, and that it would be mandatory to do so according to the Constitution.

Before any vote took place, during the morning of this Thursday they came to present the president of the Central Bank (BC), Mario Marcel; the president of the Commission for the Financial Market, Joaquín Cortez; and the Superintendent of Pensions, Osvaldo Macías. All of them asked to increase the term for payments, but that finally did not happen.

The foregoing, considering that although the government bill established that payments will be made in two equal installments of 15 business days each, the deputies on Wednesday lowered it to 10 business days for the first payment, and another 10 business days for the second. In addition, the parliamentarians defined that if the payment is less than 35 UF, everything is deposited in a fee.

The president of the BC asked for more time: “The issue of deadlines is a matter of prudence and responsibility with respect to the beneficiaries of this measure, that is, we do not get much by shortening the deadlines to a point at which the risks in there are problems at some stage of the process, that there is a failure, it means that there are people who cannot withdraw the funds within the deadlines assigned by the law ”.

Marcel explained that the first payment will take place in December, which “is the month of greatest activity and tension in all systems related to banking and the financial system (…) and, in general, this is a month in which demand by liquidity it is much higher than in any other month of the year ”.

Marcel also commented that on the first withdrawal of 10%, a quarter of all funds withdrawn, people then withdrew them in cash. This meant that in the first withdrawal there was “slightly more than US $ 4,000 million drawn in cash,” Marcel pointed out. “What does that mean in ticket terms? It means 250 million tickets ”, he added.

The Superintendent of Pensions commented that if all amounts up to 35 UF are paid in the first installment, as established by the deputies, the first payment would imply transferring resources for US $ 12,700 million, and in the second payment it would be US $ 6,000 million.

This is why Macías said that “given the great demand for cash that occurs in December, it does not seem advisable to concentrate two-thirds of the money in the first withdrawal installment.” That is why he asked to lower the limit of the first payment to 30 UF, because “it would take a lot of pressure off the cash handling of the banking system.” However, no that was not changed.

In the Senate, the voting in the room was delayed for a special reason: the deputies made a change on Wednesday regarding the subrogation of the withdrawal in case of debts for alimony, that is, they approved that there may be forced withdrawal in these cases. The senators realized that the Supreme Court was never consulted on this issue after the justices contacted them to say that this could cause problems.

The Treasury had already warned the deputies that, as happened with the processing of the law that created the Autonomous Fiscal Council and the Tax Modernization, by giving new powers to the judges, it was appropriate to wait for the Supreme Court to issue its opinion, according to article 77 of the Constitution. However, the deputies approved it without doing this procedure.

When consulting this type of issue to the Supreme, the Court has a period of 30 days to communicate its decision. Thus, the senators saw that there was no time to wait for such a response, and they decided to hold a committee meeting to make what they called a “political decision” on it. The agreement was to vote separately on this matter in the room, and it was finally approved, because they argued that if it had been rejected, the project would have had to go to a mixed commission, which delayed the initiative.

The Super Pensions has ready the draft where it instructs the AFPs on the step by step of the withdrawal, which will probably be published this Friday. There it indicates that the AFPs must allow affiliates who request it to estimate the impact of retirement on their pension. This, despite the fact that parliamentarians rejected the idea that the AFPs have a duty to report this effect.