Commission advances in hearing proposals to reform the IESS pension system

The meetings with civil society groups aimed at finding a proposal to make the pension system of the Ecuadorian Social Security Institute (IESS) sustainable began this month and are being maintained despite the delicate political moment that the Government is going through that created the Interdisciplinary Commission to prepare a reform project.

It is that the work of this commission is to deliver a proposal -which is not binding and whose processing will depend on the Executive and the National Assembly-, given the urgency of a reform so that the system does not collapse. The risk of not doing it has already been warned. “It is going to jump in the face of President Guillermo Lasso himself in the next two years or the next government at the beginning, the problem is that the hole continues to grow and it becomes more difficult for the treasury to cover it every day,” says the president. of this commission, Augusto de la Torre.

This week on the agenda are meetings in Quito, last week they were held in Guayaquil and after the carnival holiday it will be Cuenca’s turn. The first have been with the Social Security Study Table, editorial writers and economic analysts, with interdisciplinary groups from universities, rectors, young businesswomen, lawyers, directories of production chambers. Almost all have accepted, although some have not attended.

They are already making contacts to meet with labor and union leaders. “We move forward that way. We have scheduled about five meetings this week with civil society groups: Faro, Esquel, an interdisciplinary group of academics from Udla, young activists, youth leaders”.

De la Torre assures that the meetings are very frank, open and constructive, that they have many contributions and that everyone they have met with so far is aware that the system needs to be fixed so that it can live another sixty years. He describes the reception as very good.

How much can I now receive in retirement from the IESS according to my age and my years of contributions?

There are several issues that are discussed in these meetings, such as whether the Ministry of Economy should continue transferring fiscal resources to the pension system and how it believes that the amount of that annual contribution should be set, so that it is fiscally sustainable, predictable and budgetable.

Or what combination of parameter modifications would you propose to adapt the pension system to demographic change, that is, to the aging of the population and increase in life expectancy. The most important system parameters are:

1. Contribution rate (employer and employee).
2. Minimum age to be eligible for a pension.
3. Minimum number of years of contribution to be eligible for a pension.
4. Replacement rate: the amount of the pension, defined as a percentage of pre-retirement salaries.
5. Number of years of pre-retirement salaries to be taken into account for calculating the pension.
6. Maximum pension and minimum pension.
7. Number of pensions per year (12 or 14).
8. Benefits to surviving family members.

Regarding the political moment, he is aware that it is super delicate and for this reason it is thought that the proposal that is delivered to society and the Executive may not be processed easily or it is even preferred not to send it to the Assembly immediately, but rather to discuss for a while.

“Our job is to do the best job possible and consult, with technical support and provide the president and society with what the commission believes should be done to fix the pension problem through legal reform,” he says. (YO)