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THIN BLUE LINE

Peru 2015 | ECONOMY | INTERVIEW

TBY talks to Adolfo Mattos Vinces, Administrator of the Mutual Officers Association of the National Police of Peru (AMOF-PNP), on benefits for members, real estate investments, and international partnerships and connections.

Adolfo Mattos Vinces
BIOGRAPHY
Adolfo Mattos Vinces has spent 35 years in the Peruvian police service, with a doctorate in government and public policy, a master’s degree in drug addiction studies, a degree in electric engineering, a diploma in business administration from ESAN, a diploma in international cooperation management strategies for the financing of project development, and a diploma in research and strategic planning. He has managed, with national and international technical assistance and cooperation, the creation and implementation of the Regional School for the Andean Community for Antidrug Intelligence, the School for Research on the Trafficking of Illicit Drugs, the Academy for the Application of the Law with the US government, and the PNP Telematics School. He managed the financing and construction of the Centro Empresarial PREMIUM AMOF-PNP. He also signed an agreement with the regional government of ANCASH for citizen security.

How has the Association transformed itself into an essentially public organization?

The AMOF-PNP was established on November 5th, 1992 as a Mutual Association, a company to provide benefits and services to the officers of the National Police of Peru (PNP), who are civil servants. The Association, however, develops itself in the private sector, i.e. no public entity of the Government is involved in management activities, and we are governed by our own statute and regulations. Today, we are comprised of more than 9,500 Official PNP associates and considering that the police in our country has about 100,000 troops, this means that about 10% are associates. Financially, the Association is based on the monthly contribution of its Associates - equivalent to 3.5% of the salary of Alféreces; so contributions are dynamic, the higher the salary, the higher the contributions. Now the monthly contribution amounts to $22. Over the past decade, our heritage has grown from about $4.3 million to about $25.2 million. At the beginning, income came from the contributions of associates and then we expanded that as we ventured into other business segments within the real estate sector, particularly real estate surpassing significantly the profitability of contributions from associates. This new business unit in the real estate sector (renting of PRIME offices to top companies) has allowed us to capitalize the company, accelerate the growth-development, and strengthen the Associated Pension Fund.

What kind of benefits does the AMOF-PNP offer to its associates?

Among the benefits the association offers, the principal is the Mutual Benefit for Retirement (BMR) and occurs when the state makes Renewal of Troops and Associated Pensioners move into retirement. AMOF-PNP gives the Mutual Benefit for Retirement plus the profitability generated during the time the officer was on active duty. The responsibility of the government is to make profitable the Contributions Fund during that period. In this sense, we have developed and marketed real estate projects. We also provide Mutual Benefit for Death (BMF) and the Mutual Benefit for Disability (BMI) to officers and/or family, meaning that it works as a family insurance at low cost (deaths of associate, spouse, children, parents and disability of the associate). In addition, we grant associative loans, taking as collateral the amount accumulated by the Associate Contributions.

How has AMOF-PNP involved itself in the real estate sector?

We have developed four real estate projects intended to associates and the general public, what actually enhanced profitability. The fifth project is the Premium AMOF-PNP Business Center, which has an approximate floor area of over 10,000sqm, on a 1,050sqm area. To date we have invested more than $10.75 million in this building, expected income will allow us to pay the debt acquired with Banco Scotiabank in Peru for construction and increasing and improving benefits and services for our Associates. With the development of real estate projects, we gained knowledge and experience in this sector, and we now have premium office in the heart of the upscale district of Miraflores. This allows us to obtain high rental return of the same, between 15-16%, because the value of land in the area has increased from $1,800 per sqm when we acquired it to $5,000 per sqm. We did not have to resort to extraordinary contribution quotas from associates.

Does the Association have international partnerships?

We have created the International Institute for Research and Development against Organized Crime (IRDAOC), an NGO aimed to harness the knowledge and professional experience of the police in several countries. As technology advances, the crime does as well, and this NGO aims to strengthen the powers of the associates through academic events such as courses, seminars, and forums, among others. With our new offices in the Premium AMOF-PNP Business Center, we will go ahead with this project and achieve the goals we set for ourselves four years ago in its creation. Part of the project is to strengthen international cooperation and technical assistance in support of the institutions involved in the fight against organized crime. There will be an exchange of experiences and knowledge, which will strengthen the position of the police not only in Peru but also internationally. For example, a few years ago, the UN proposed a new approach to address insecurity and combat violent crime, called: Human Security. We must train cadres, a “critical mass" that would contribute to enhance, optimize, and maximize this new approach, considering that the most important thing that each company has is its human capital.

What is your vision for the growth of AMOF-PNP over the coming years?

Being the leading institution of its kind, quality standards and excellence in the provision of benefits and services that provide added value, and meeting the needs and expectations of associates and their families. In this context, we face several challenges, and one of these is to consolidate our corporate identity, and to consolidate our projects and generate revenue to work with more financial leverage. We are evaluating opening new business lines such as clinics for PNP Officers. We are also venturing into the stock market with our promissory notes for up to $3.07 million to transform these into commercial paper notes that can be traded publicly on the stock exchange in order to obtain new credit lines and meet the demand for loans to associates. We also aim to maintain the system certification on quality management ISO 9001: 2008, because since 2009 we have 10 audited and certified processes. Once we start working in our new facility, the goal is to expand the current scope and certify the maximum number of processes possible.


 

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