This is file 21.665, called “Early withdrawal of the Labor Capitalization Fund to reactivate the economy”, presented by a group of congressmen on October 23rd, 2019, for which the corresponding procedure in Congress has just begun, therefore, has not yet been approved.

The FCL is the supplementary pension scheme created in 2000 with the entry into force of the Worker Protection Act (LPT), which consists of the accumulation of 3% of the salary that each employer must contribute per person, and that It is administered by the Complementary Pension Operator (OPC) to which the employee is affiliated. This fund may only be withdrawn by the employee at the end of the employment relationship, upon being fired, or after serving five years working for the same company.

However, the bill proposes a reform in the Worker Protection Law, which allows, for one time only, to withdraw the amounts of the FCL, without having to meet the above requirements, within a period of forty-five calendar days, counted from the moment the affiliate files the request.

The main objective, according to the congressmen who propose the reform, is the reactivation of the economy, by allowing people to access the money, to cancel or amortize their debts, invest in own businesses, or allow them to pay for goods and services that reactivate the economy and generate employment.

What risks does this imply?

• The early withdrawal of the FCL carries the risk that the person will be unprotected if they are unemployed, while affecting their supplementary pension by reducing what is transferred each year from the fund to the Mandatory Pension Scheme (ROP).
• It would only boost consumption at a specific time.
• A lack of money that should be allocated to cover the basic needs of people when they are laid off while they find another job.
• Also, you would reduce your future pension by running out of 1.5% of your salary that must be transferred to the ROP every year, according to the law.

What would be the benefits?

• It would allow citizens the total withdrawal of what is accumulated in their Labor Capitalization Fund (FCL) to pay debts, make investments, or to consume. It is proposed as a measure to revive the economy.
• In the short term, they would have access to that money to cancel or repay their debts, invest in a business or venture or, simply to consume goods.
• If the project is approved, everything that is available in the fund would be delivered within a period not exceeding 45 days to the person requesting it, without having to wait five years, resign, or be fired.
• You could also withdraw what you contributed during the year that would normally be transferred in that month to the ROP.
• After the withdrawal, the five years needed for the next withdrawal would start running again.

Requirements to proceed with the Withdrawal of the Labor Capitalization Fund (FCL).

• Determine if you actually have five years of working for the same employer.
• To access this right, you must present a letter from the employer signed with the seal of the company, indicating the work continuity (date of entry to the company, day, month and year).
• In addition, when the employer is a natural person and the letter does not comply with the formality (letterhead, signature and respective stamp) a copy of the employer’s ID card must be attached.
• The financial entities will verify the work continuity in virtual Sicere (virtual platform), considering a maximum of discontinuity periods of up to 6 months without contributing to make the work continuity valid with the employer, as long as during said period they have not been quoted by another employer.
• In cases where there is a change of company name, you must present a letter issued by the employer signed and stamped with the company seal, specifying the changes of company name that were presented and the work continuity (date of entry to the company, day, month and year).
• In cases where there are periods not quoted for periods of disability or leave without pay, you must present a letter issued by the signed employer, stamped with the company seal, specifying work continuity (date of entry to the company, day, month and year).

Moments when the FCL can be Withdrawn.

There are currently three times when the FCL can be withdrawn:

• The employment relationship is terminated for any reason (Waiver / Dismissal).
• Death of the worker in favor of a beneficiary.
• Every five years when the worker maintains the same employment relationship.
• If the money is not withdrawn, the amount not withdrawn is available to the member indefinitely.

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