In the midst of heavy conflicts and protests, heThe French have decided to reject the proposal of their President Emmanuel Macron on increasing the minimum retirement age, while the World Bank calls for an increase in the age worldwide in order to maintain the share of the economically active population. Both facts reflect that the problem of social security extends throughout the world. Ecuador is no exception.

In accordance with Augusto De la Torre, former chief economist of the World Bank for the region and the current head of the Inter-Institutional Commission that seeks to reform the pension system of the Ecuadorian Social Security Institute (IESS), there are great differences and similarities in the problems of pension systems around the world. Pay-as-you-go systems such as those in Ecuador, the US and France face the impact of a longer lifespan on the system’s deficit. They in turn transfer the problem to the tax issue. In this sense, various governments around the world are trying to limit the fiscal impact.

However, countries have different ways of absorbing the problem. In some who are prosperous and have the ability to borrow, they do so by acquiring more debt to cover those gaps. But, for example, there would be no place for that in France Macron proposes raising the minimum retirement age, which caused this impressive reaction. In this sense, we can talk about the tragedy of the commons, which is that resources belong to everyone, they also belong to no one, people say that the treasury should take care of the problem, but we are all affected by this problem, for example in the increase of taxes.

Another interesting case is the case Argentina, for which the Government pays between 7% and 8% of GDP. They solve it there by issuing tickets, which ultimately affects inflation. They are currently at 105% inflation and are in danger of hyperinflation. In both cases, this leads to the dissolution of pensions. Retirees nominally receive the same pensions, but their purchasing power is significantly lower.

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

Now, in the case of Ecuador, says De la Torre, If we do not implement the pension reform, we will start to face this problem that the system cannot cover its obligations and that the burden on the treasury is increasing. This shows that the Government would hardly have a way out if the reforms were not implemented. For example, it is very difficult for you to borrow to cover a 40% issuance; He doesn’t see a sustainable tax increase either. Another option would be to reduce costs, but then it would be a question of who is being reduced. If you wanted to issue banknotes, this is not possible in dollarization.

In any case, De la Torre assures that despite opposition to possible reform, the Commission continues to make progress. “We had 26 meetings with civil society groups, with analysts, editors, lawyers, representatives of employers, women, with representatives of people with disabilities, with pensioners, academics. On the technical side, we had technical meetings and their teams with the Inter-American Development Bank (IDB) and the World Bank. For De la Torre, what is required is to improve a few points in retirement:

He comments that the only meetings that were not possible were those with union sectors. He would like them to be able to compare notes and explains that the fact that he is meeting with the commission does not mean accepting what the commission says, but simply having a dialogue.

In the meantime, Mauricio Espinel, Coordinator of the Desk for Social Security Studies, explains that the social security system in France cannot be compared to what exists in Ecuador. And he says he usually asks his students to look at Michael Moore’s Sicko, which talks about the reality of pension systems in the US, Cuba, France and other countries. In any case, he clarifies that the benefits that exist in France are very important, and have been built throughout history on the basis of public policies that give social priority. So the French have a tradition of fiercely defending their conquests or advances, even since the French Revolution. In this sense, society sees the issue as a setback in its rights, even if this measure means maintaining the sustainability of the system.

IESS members retire between the ages of 53 and 73, depending on age, disability or disability.

for spinel This system cannot be compared with the one in Ecuador, that although on paper it assumes excellent benefits, in reality it is not fulfilled. This indicates that our politicians prefer to build large visible and redundant works, even if basic needs are not covered before that. However, he believes that progress has been made with the Inter-Institutional Commission in the case of Ecuador. He explains that studies were conducted to obtain information on the behavior of associations in general, voluntary memberships, payments to retirees, among others. He regrets that there are certain sectors of the profession identified as leftists who assure that one should not talk to those from the right, referring to people from the committee. With the lack of dialogue, the only thing that can happen is that the proposal does not go beyond a good technical proposal that again remains on the shelf. Espinel needs a lot of tolerance and putting himself in someone else’s shoes, but that doesn’t happen in the country.

for his part, Henry Llanes, member of the Association of Branches, Pensioners and Pensioners of IESS Pichincha, He says that he does not know the French social security system, but it is known that in the Nordic countries the insurance systems work well because the funds are provided in triple A. Regarding the process of seeking reform carried out in Ecuador, he indicates that a consensus cannot be generated if it is not set question to each of the branches of IESS. For Llanes, the possible proposal of individual capitalization does not correspond to the principle of solidarity that the system must have.

He believes that the reform of the Commission led by Augusto De la Torre will not have an impact. In any case, he claims that the reform is already in the assembly, that instead it is led by your organization that proposes genuine reform that can help stop the bloodshed of IESS, which is that the social protection institution stops providing services to all those who do not pay contributions. In this sense, it would be members’ children, housewives, people with disabilities and people with catastrophic illnesses. As for retirees, who also do not contribute to health when they are no longer active, this indicates that a way for the retiree to contribute will be sought.