The pension fund of the Ecuadorian Social Security Institute (IESS) could have about ten years of life under current conditions. These conditions include the current contributions of the affiliates, the annual expenses that are more than $4.900 million and with a contribution of between 28% and 30% that the State is actually making (not the 40% established by law).
That was one of the revealing data that was given on January 12, 2023 during a press conference offered by the Social Security Study Table, made up of citizens of civil society and whose objective has been to contribute with diagnoses and technical proposals. for the sustainability of Social Security.
During the event, Fernando Mosquera, an expert in social security and part of the Board, said that before the approval of the so-called Social Justice Law (2015), the IESS fund had $14,000 million, but with the law it was taken away. 40% contribution from the State to the IESS and this caused the fund to be reduced to $9,000 million. Today that fund barely has $6,000 million and if it were not for that contribution (although less than the legal one) that the State is making, the fund would not hold out for another year.
The Board held a seminar this morning on four fundamental pillars that refer to the complex situation of the Ecuadorian Social Security Institute. These are:
- Health in Social Security
- Institutionality and how to reorganize Social Security
- retirement funds
- The investment issue
Mauricio Espinel, coordinator of the Table, said that last October the Table had already proposed to the Presidency, Assembly and other authorities that these four issues be dealt with at the national level, through a broad debate. He regretted that so far they have not received any response from any of these authorities. In any case, he indicated that this event was precisely seeking to generate a debate with authorities, unions, affiliates, and the media.
Regarding the Citizen Commission created by the Government and announced by President Guillermo Lasso, this week to deal with the issue of pensions, and which is headed by Augusto de la Torre, he said that they welcome said decision and hope that others will be created similar ones to deal with the other outstanding issues.
Among the premises that the Board handles is the concern for the change in population structure. Mosquera explained that at the moment life expectancy has increased. This has led to a pay-as-you-go system like Ecuador’s having fewer active taxpayers to finance retirees. Additionally, actuarial studies have not been carried out every three years as provided by law, nor has there been specific monitoring of the true impact of the 40% State contribution on pensions. In any case, he said that the system has reached such a point that neither increasing the retirement age, nor increasing contributions, nor limiting the issue of pensions, is enough to cover the needs.
In this sense, it is important to find “a middle point, in which not only the tax issue prevails, but also a human face”, but there must be an adjustment, which should be gradual.
The idea, according to Fernando Mosquera, is to continue with intergenerational solidarity, but also to have an individual account that encourages young people to contribute.
Édison Ortiz, from the Stock Market and also a substitute member of the IESS on behalf of the employers, considers on the issue of IESS investments that it is important for the IESS to invest in the Stock Market. He explained that many authorities have said that some $300 million will be invested, but it is not much. He also observed that there is a significant investment in the public sector in government bonds that are constantly renewed.
The event was attended by representatives of workers, employers, retirees, among others. (YO)
Source: Eluniverso
Paul is a talented author and journalist with a passion for entertainment and general news. He currently works as a writer at the 247 News Agency, where he has established herself as a respected voice in the industry.
