Peru proposes law to protect private pension funds
By Dante Alva
LIMA, May 5 (Reuters) - Peruvian lawmakers will soon discuss a proposal that would safeguard $30 billion in private pension funds from meddling by future governments, the head of the Congress's economic commission said on Thursday.
The bill is in response to a clause in presidential candidate Ollanta Humala's campaign platform calling for all workers to contribute to a newly revamped public pension system and making contributions to private funds, known as AFPs, optional.
The measure, sent to Congress by President Alan Garcia on Wednesday, preserves "the right to choose between a public or private pension fund so that no intervention from authorities can violate that," commission head Rafael Yamashiro said.
Private pension funds in Peru, one of the world's fastest-growing economies, are the biggest investors in the local stock market and also put money into housing construction, infrastructure and government bonds.
"The funds belong to contributors and there can't be intervention from the government of the day," Yamashiro said.
Some analysts fear ultra-nationalist Humala would repeat Argentina's takeover of private pension funds in 2008.
But Humala, technically tied in polls with right-wing lawmaker Keiko Fujimori ahead of a June 5 run-off vote, seemingly backtracked last month when he vowed not to touch the AFPs if elected.
His team says the nationalist party's proposals, including guaranteed pensions for all Peruvians over 65 years old, would be funded by new taxes.
Peru's anemic public pension system is plagued by problems, with contributing individuals and firms often missing payments.
About 4.7 million people contribute to the AFP funds, representing the bulk of workers enrolled in a pension plan.
Humala narrowly lost Peru's 2006 presidential election on a radical leftist platform and he has since sought to recast himself as a moderate in the style of Brazil's Luiz Inacio Lula da Silva.
He pledges to respect Peru's many free-trade agreements and an independent central bank, but he has faced increasing pressure to explain discrepancies between his public positions and his official campaign platform.
(Writing by Caroline Stauffer; Editing by Hilary Burke and