Employee Benefits in Peru 2021

The social security system in Peru is still undergoing significant change, with low social security contributions due to the informal nature of the labor market as most of the workers are self-employed and lack of information and valuation within the system. In the early 1990s, during the country’s financial crisis and the near collapse of the Sistema Nacional de Pensiones (state-run pension system or SNP), the social security system introduced the Sistema Privado de Pensiones (private pension system, or SPP) to offer benefits in the event of old age, disability, and death. The SPP is administered by private entities – Administradora de Fondo de Pensiones (pension fund administrators, or AFP). The SNP functions as a defined-benefit (DB) system and the SPP functions as a defined contribution (DC) system. The participation of private health contractors was promoted through a complementary scheme, under the supervision of the then Superintendent of Health Service Company (SEPS). The Comprehensive Health Insurance (SIS) was introduced in 2002 to provide universal cover for essential health services and income security to nationals. Peru enacted the Law of Universal Health Insurance in 2009. Later, Act No. 29792 created the Ministry of Development and Social Inclusion (Ministerio del Desarrollo e Inclusion Social, MIDIS) on October 20, 2011. Private employee benefits are also slowly gaining popularity in the country.

The report provides in-depth industry analysis, information, and insights of the employee benefits in Peru, including an overview of the state and compulsory benefits in Peru, detailed information about the private benefits in Peru, insights on various central institutions responsible for the administration of the different branches of social security and the regulatory framework of the employee benefits in Peru.

The Peruvian social security system consists of four branches, which are supervised by various ministries –

– El Seguro Social de Salud del Peru (The Social Health Insurance – EsSalud): This is a public agency that aims to cover policyholders and beneficiaries by providing services to prevent health-related problems. It also provides rehabilitation services, economic and social benefits against the tax regime of the social security system, and other insurance risks.

– Contraloría General de la República (Comptroller General of the Republic – CGR): This is an autonomous and central body, which is part of the National Control System, managing the execution of public sector budgets, the operations of public debt, and the management and use of public resources and assets.

– La Superintendencia de Banca, Seguros y AFP (The SBS): The SBS is a public institution identified by the Constitution of Peru. Its main objectives and functions are to set out in the General Law of the Financial System and Insurance System and Organic Law of the Superintendence of Banking and Insurance. The SBS is also responsible for the regulation and management of financial systems, Insurance, and Private Pension System, and to prevent money laundering and terrorist financing. Its main objective is to guard the interests of the depositors, insured, and members of the SPP.

– La Superintendencia Nacional de Aduanas y de Administración Tributaria (The National Superintendent of Tax Administration – SUNAT): The SUNAT is a public decentralized organization of the economy and finance sector with rights under Public Law No. 24829 and Legislative Decree No. 501, and with autonomy in handling administration, economy, finance, budget, and technical operations.

Scope

This report provides a detailed analysis of employee benefits in Peru –

– It offers a detailed analysis of the key government-sponsored employee benefits, along with private benefits

– It covers an exhaustive list of employee benefits, including retirement benefits, death in service, long-term disability benefits, medical benefits, workmen's compensation insurance, maternity and paternity benefits, family benefits, unemployment, leave and private benefits

– It highlights the economic and regulatory situations relating to employee benefits in Peru

Reasons to buy

– Make strategic decisions using in-depth information related to employee benefits in the country

– Assess employee benefits of the market, including state and compulsory benefits and private benefits

– Gain insights into the key employee benefit schemes offered by private employers in the country

– Gain insights into key organizations governing employee benefits market, and their impact on companies

Table of Contents

Table of Contents

1. Executive Summary

2. Introduction

2.1 What is this Report about?

2.2 Definitions

3. Country Statistics

4. Overview of Employee Benefits in Peru

5. Regulations

6. State and Compulsory Benefits

6.1 Retirement Benefits

– Introduction

– Eligibility

– Benefits

– Payment options

– Contribution

6.2 Death in Service

– Introduction

– Eligibility

– Benefits

– Payment options

– Contribution

6.3 Long-Term Disability Benefits

– Introduction

– Eligibility

– Benefits

– Payment options

– Contribution

6.4 Short-Term Sickness Benefits

– Introduction

– Eligibility

– Benefits

– Payment options

– Contribution

6.5 Medical Benefits

– Introduction

– Eligibility

– Benefits

– Payment options

– Contribution

6.6 Workers’ Compensation insurance

– Introduction

– Eligibility

– Benefits

– Payment options

– Contribution

6.7 Maternity and Paternity Benefits

– Introduction

– Eligibility

– Benefits

– Payment options

– Contribution

6.8 Other Benefits

– Family Benefits

– Unemployment benefits

– Leaves and Holidays

7. Private Benefits

7.1 Retirement Benefits

7.2 Death Benefits

7.3 Medical Benefits

7.4 Disability Benefits

7.5 Accidental and Dismemberment Benefits

7.6 Other Benefits

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List of Tables

List of Tables

Table 1: Insurance Industry Definitions

Table 2: Peru – Country Statistics

Table 3: Peru – Old-Age Pension, Percentage of the Insured’s Earnings

Table 4: Peru – Retirement Benefits, Reference Salary

Table 5: Peru – Fixed National and Public Holidays, 2021

List of Figures

List of Figures

Figure 1: Peru – Main Institutions of Social Security System

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