AFP vs. ONP in Peru: which to choose, and what happens if you never decided

AFP and ONP: the two pension systems in Peru

Peru has two systems for your retirement pension:

• SNP (Sistema Nacional de Pensiones), run by ONP: a public pay-as-you-go system, where your contributions go into a common fund and your future pension depends on your years of contribution and fixed rules set by law.
• SPP (Sistema Privado de Pensiones), run by the AFPs (Integra, Prima, Profuturo, Habitat): an individual-capitalization system, where your contributions go into your own personal account, get invested, and your future pension depends on your accumulated balance and the returns earned.

Key differences in contributions

Based on the text of Law N° 32123 that we read directly on the official gazette:

• SNP/ONP: the contribution cannot be less than 13% of your monthly insurable pay (Article 8.1).
• SPP/AFP: the contribution is made up of 10% to your individual capitalization account, plus an insurance premium (for disability and survivor benefits) and the AFP’s commission (Article 8.2). In practice, your total payroll deduction usually ends up a bit above 10%, depending on each administrator’s commission.

How the pension is calculated in each system

Under the SNP (ONP), the pension is calculated based on your years of contribution, your age, and current regulations (historically based on Decreto Ley 19990), with reference minimum and maximum amounts. We could not directly verify the exact, up-to-date formula from ONP’s own official source in this review, so this point relies on secondary sources.

Under the SPP (AFP), your pension depends on three factors: how much you accumulated, how much return your fund generated over the years, and the withdrawal method you choose at retirement (for example, a programmed withdrawal or an annuity).

Retirement age

Law 32123 sets 65 years, for both men and women, as the retirement age (Article 12), with early-retirement options from age 55 under specific conditions you should verify for your case.

What happens if you never chose? The default rule

This is the most important point for a lot of people: if you started working formally and never stated a preference between AFP and ONP, Law 32123 sets a default-enrollment rule:

• If you’re a new worker from age 18 and didn’t state your preference within the applicable period, the law says you’re enrolled by default in the SNP (ONP) (Article 29.1).
• If you’re an adult who was not yet affiliated to any system and also didn’t choose, the law says you’re enrolled in the SPP (AFP) (Article 29.3), through an assignment process among administrators.

This is a real asymmetry in the law: young people newly entering the labor market who don’t choose go to the public system, while adults who had gone unaffiliated for a while go to the private system. We could not confirm from official sources the exact date these default-enrollment rules take full effect, nor every detail of the corresponding regulation, so if this affects you directly, it’s worth confirming with SBS or with your employer.

In September 2025 several bills were filed to repeal Law 32123. One of them, Bill 12411/2025-CR by congressman José León Luna Gálvez, stayed in the Economy Committee from 16 September 2025, never reached a plenary vote and, as of 30 September 2026, is not among the bills of the new Congress (2026-2031 term). Law 32123 remains in force.

What did change Law 32123 is Law 32445, published on 20 September 2025: it amended paragraphs 11.4 and 14.4 and the fifteenth final complementary provision, and repealed article 9 and the seventeenth final complementary provision. We checked its text on 30 September 2026: it did not change articles 8, 12, 29.1 or 29.3, which are the ones explained on this page.

Can you switch systems later?

Yes, mechanisms exist for switching between SNP and SPP, though with specific requirements (for example, ONP’s so-called Recognition Bond is not automatically granted to everyone who switches). We could not verify the full, up-to-date switching procedure after the reform from official sources, so if you’re considering switching, the safest step is to get direct guidance from SBS before deciding.

What to do if your employer never enrolled you in anything

Your employer is required to inform you about both systems and to register your enrollment when your formal employment relationship begins. If they never did, that’s a failure of their labor obligations, and you can demand they fix it or file a complaint. This connects directly to how your final settlement of labor benefits is calculated, and to your bonuses, CTS and vacation, which also depend on your employer correctly handling your contributions and records.