Penalty for late payments to AFPs

- Wednesday, July 14, 2004

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In an effort to boost pension fund contributions in Bolivia, affiliates whose payments arrive late will no longer receive a government housing subsidy, local press reported.

The problem is that 1,070 or 5.8% of the firms currently holding contracts with pension fund administrators AFPs are late in payment, according to regulator statistics.

These companies have already deducted the 12.5% from workers' salaries, but are at least one month late in making payment to the AFPs. Therefore, in most cases it is the employer who has not made the pension payments, but under the new rule employees will be penalized if payments have not been made on time.

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Workers will be responsible for reporting whether their employer has been forwarding pension contributions in order to qualify for the housing subsidy.

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