After a longer period of service in the company, there are workers who can receive the benefits established by the Labor Law. It is about the retirement of the employer.

The employer’s old-age pension is a lifetime pension that is earned by workers who have completed 25 or more years of service, in accordance with Article 216 of the Ordinance.

This also applies to users who have more than 20 years of service and less than 25 years in case of early termination.

When is it applied and how is the employer’s pension calculated?

The Chamber of Commerce of Quito explains that to determine this retirement, the worker’s reserve fund and an amount corresponding to 5% of the average annual salary received in the last five years must be taken into account and multiplied by the years of service. It is important that the worker was a member of IESS.

When the worker was connected to the IESS, the amounts deposited by the employer into the IESS for employer contributions or reserve funds will be deducted from the individual pension credit, provided that the latter are taken into account for the calculation of the individual credit. “, it was indicated.

Once the individual pension credit is determined, it will be divided by the appropriate coefficient provided for in article 218. “The amount resulting from this operation constitutes the annual pension, which divided by twelve is equal to the monthly pension.”

What are the options that the employee has to access the employer’s pension?

Article 216 states that the employer’s monthly pension will never be greater than the average single basic compensation for the previous year nor less than thirty dollars. A retired worker can also request that the necessary capital be deposited with the Ecuadorian Social Security Institute in order to retire himself or “can request that the employer directly deliver the global fund based on a duly substantiated calculation.”

Among the benefits that the employer has for the pensioner are: