What are the statutory pension benefits in Peru?

Social Security in Peru comprises two programs with two components:

1. Social Insurance (SNP): This is a public social security program that includes Retirement Pension Program and Permanent Disability benefits.

2. An individual account system (SPP): This is a private individual account program that also includes Retirement Pension Program and Permanent Disability benefits.

Employees in the SNP (Social Insurance) program can choose to switch to the SPP (individual account system) program and may switch back under certain circumstances. Both programs are funded exclusively by employee contributions; the government and employers do not contribute.

Retirement Pension Program:

• SNP Program: Employees with at least 20 years of contributions are eligible to receive a pension upon reaching 65 years of age. The pension amount is based on age and percentage of income.

• SPP Program: Employees are eligible to receive a pension at the age of 65 or at any time if the individual account has accumulated enough assets to replace at least 50% of the average indexed income over the last 120 months. The pension amount depends on the employee's contributions to the individual account and the accrued income.

Permanent Disability Benefits:

• SNP Program: The disability pension is 50% of the average income in the past year, plus an additional 1.5% for each year of contributions beyond 3 years. For 1 to 3 years of contributions, 1/6 of the average income is paid for each year of contributions.

• SPP Program: The disability pension is calculated based on the employee's average monthly income and is proportionate to the level of disability.