Peru (PE)
Peru combines world-class food, ancient Inca heritage, Pacific coastline, Amazon rainforest, Andean cities and one of Latin America's lower cost-of-living profiles.
Retirement & Pension in Peru
State pension, contribution refunds, private pension vehicles, and international agreements.
Peru operates a dual mandatory pension system: workers choose between the public ONP (Oficina de Normalización Previsional — Sistema Nacional de Pensiones / SNP) and the private AFP (Administradoras de Fondos de Pensiones — Sistema Privado de Pensiones / SPP). ONP: 13% employee contribution, defined-benefit PAYG. AFP: approximately 10% to individual capitalisation account + 1.37% insurance + commission (average total: approximately 12.95% of taxable remuneration under the Remuneration-Based Commission scheme). Retirement age: 65 for both men and women. AFP system underwent multiple extraordinary withdrawal rounds (eight through 2025). Peru has a bilateral tax treaty with Spain (2008). As of 2026, Peru has limited social security totalization agreements — fewer than most OECD countries.
State Pension
ONP (public system): defined-benefit PAYG. Employee contributes 13% of gross salary. Pension paid monthly from age 65 with at least 20 years of contributions. Maximum ONP pension: PEN 893/month (capped). Minimum ONP pension: PEN 500/month. AFP (private system): individual capitalisation accounts. Employee contribution: 10% of taxable salary to individual account + 1.37% group life/disability insurance premium + AFP management commission (average 1.58% under the Remuneration-Based Commission scheme, or lower under the Mixed/Balance-Based Commission). Total average AFP contribution: approximately 12.95% (Remuneration-Based) or 11.37% (Mixed scheme). AFP pension is not capped — depends entirely on accumulated balance and investment returns.
Standard retirement age: 65 for both men and women (ONP and AFP). Early retirement: AFP members may access early retirement if their accumulated balance would generate a pension at least equal to 115% of the minimum pension. ONP: no early retirement — must reach 65 with 20 years of contributions.
ONP: minimum 20 years of contributions for any pension entitlement. Below 20 years: ONP contributions do not generate a pension — only a refund (devolución) of contributions at age 65 or on departure. AFP: no minimum years — individual account balance determines pension regardless of contribution period. Any AFP balance at age 65 generates some level of pension.
ONP: check contribution history and estimate via gob.pe/onp. AFP: check individual account balance, projected pension, and fund performance on your AFP provider's online platform (Prima AFP, Profuturo AFP, Integra AFP, Habitat AFP). Use AFP pension simulators for projections under different scenarios.
ONP pension is payable to a Peruvian bank account — international transfer requires coordination with Banco de la Nación or a Peruvian bank. AFP pension (as annuity): insurers may arrange international payment. AFP balance: can be drawn down as programmed withdrawal (retiro programado) — may be payable to international account depending on AFP rules. Confirm payment arrangements before departing. Peruvian pension income may be subject to Peruvian income tax — check applicable double tax treaty with your country of residence.
Pension Contribution Refund on Leaving Peru
ONP: if you have fewer than 20 years of contributions at age 65, you receive a devolución (refund) of your own ONP contributions — not at departure, but at age 65. AFP: members leaving Peru permanently may access their individual account balance under specific conditions depending on nationality, age, applicable treaties, and current law. The rules are politically sensitive and have changed multiple times — obtain current written advice from your AFP.
ONP contributions are not refundable before age 65 under the standard rules. AFP members below retirement age who are still employed do not have automatic withdrawal rights — extraordinary withdrawal provisions enacted during COVID-19 and subsequent periods have been restricted as of late 2025.
Depends on withdrawal route and applicable law. Obtain written advice from your AFP or ONP before departure. Rules have changed frequently and may change again.
AFP individual account: the balance (10% contributions + returns minus commissions and insurance costs) is the member's property. EsSalud (employer health contribution of 9% of gross salary) is NOT refundable — it is a health insurance contribution, not a pension contribution. ONP: 13% employee contributions form a pooled fund — only refundable as devolucion at 65 for those with under 20 years.
AFP: through your AFP's formal channels with identity documents, migration records, and bank account details. ONP: at Oficina de Normalización Previsional (gob.pe/onp) with same documentation. EsSalud: not applicable — no refund.
Rules governing AFP withdrawals and ONP are politically sensitive and have changed multiple times in recent years — including eight extraordinary withdrawal rounds through 2025. The Peruvian Congress prohibited further extraordinary withdrawals and restricted the 95.5% total withdrawal right for members under 40 as of recent legislation. Do not rely on withdrawal rules from previous years. Obtain current written confirmation from your AFP and a Peruvian pension adviser before making decisions.
International Totalization Agreements
Peru has very limited social security totalization agreements compared with most OECD countries. The main agreement is with Spain (bilateral tax treaty, 2008 — covers income tax treatment of pension payments, not full social security totalization). There is no comprehensive US-Peru social security totalization agreement. Workers from most countries will find their Peruvian AFP or ONP contributions are entirely standalone — not coordinated with their home country. Verify any claimed agreement directly with the Peruvian Ministry of Labour (trabajo.gob.pe) or SUNAT, as the landscape is limited.
Private Pension Vehicles
AFP account (individual capitalisation)
Cuenta AFP / Sistema Privado de PensionesFormal private sector workers who select or are enrolled in the private AFP system. Four AFPs operate: Prima AFP, Profuturo AFP, Integra AFP, Habitat AFP.
No government top-up. The AFP system is entirely funded by employee contributions to individual accounts.
Retirement savings structure. AFP contributions are made from pre-tax gross salary. At retirement, pension income is subject to Peruvian income tax at applicable rates. Lump-sum withdrawals taxed differently — consult AFP.
Mandatory: approximately 10% to individual account + 1.37% insurance + commission. Voluntary additional contributions (aportes voluntarios) can be made with or without pension character.
AFP individual accounts are the property of the member — more portable than ONP in theory. Portability out of Peru for non-residents depends on current law and AFP rules. Compare all four AFPs on fees before changing providers.
Compare AFP commissions and fund types (Type 0 — capital preservation through 65; Type 1 — conservative; Type 2 — mixed; Type 3 — growth) carefully. Members can switch between fund types and change AFP provider (once per year). After eight extraordinary withdrawal rounds through 2025 significantly depleted many accounts, AFP balances for many workers are much lower than they would otherwise be.
International brokerage / retirement account
Cuenta de inversión extranjeraExpats with foreign tax planning obligations who want to build retirement savings outside Peru's AFP/ONP system — the most practical vehicle for most non-Peruvian expats.
None in Peru.
Depends on home country and Peru tax residence. Peru taxes residents on worldwide income after 183 days in the country (non-domain income rules apply). Check applicable double tax treaty between Peru and your home country.
Home-country/platform rules.
High — best portability of any vehicle for foreign nationals.
Peru tax residency (183+ days/year) triggers worldwide income reporting to SUNAT. Seek advice from a Peruvian contador and a home-country adviser before establishing long-term Peru residence. CRS reporting obligations apply.
Real estate income
Renta inmobiliariaLong-term Peru residents seeking rental yield as a retirement income stream.
None.
Rental income is taxable in Peru at a flat 5% on gross rental income (for non-residents) or at progressive rates for residents. Capital gains subject to Peruvian rules.
N/A
Low — property is illiquid. Rental income can be transferred internationally subject to FEMA/Peru banking controls.
Research title registry (SUNARP), infrastructure risks, and property management carefully before purchasing. Legal and title risks vary significantly by region. Use a reputable Lima-based notary and attorney.
Early Retirement Options
AFP early retirement: available if the projected pension from the accumulated AFP balance equals at least 115% of the minimum monthly pension. AFP members meeting this threshold can retire before age 65. ONP: no early retirement provision — 65 is the fixed age. "Jubilación anticipada" (early retirement) under AFP has specific eligibility rules that change — verify current requirements with your AFP. Peru's recent pension reform legislation (2024, partially weakened in September 2025 by the eighth extraordinary withdrawal) changed early access provisions — treat this as specialist-advice territory requiring current legal advice.
Pension Gap Warning
A foreigner spending years in Peru as an informal contractor (recibos por honorarios / fourth-category income) pays no EsSalud and makes no AFP/ONP contributions — resulting in no Peruvian pension entitlement whatsoever. Even formal workers who made multiple AFP extraordinary withdrawals through 2025 may have significantly depleted accounts. Key risks: (1) No guaranteed minimum AFP pension — only what your individual account balance generates; (2) ONP pension is capped at PEN 893/month — very low by Western standards; (3) No bilateral agreement with most home countries means no coordination protection; (4) Political risk — AFP/ONP rules have changed multiple times and may change again. Build a separate, internationally portable retirement plan that does not depend on Peruvian pension rules remaining stable.
Useful Links
Retirement & Pension
Unlock the complete Retirement & Pension guide for Peru — including every detail, document, tip and link you need.
Become a SupporterSupport the guide on Ko-fi · Unlocks every premium section, everywhere