In Ecuador, there is a significant increase in self-employed workers, and it is precisely this workforce that is targeted by the Citizens’ Commission for Pension Reform of the Ecuadorian Social Security Institute (IESS), which now proposes to include them in the system as taxpayers.

In the current Law on Social Security, in Article 2, it has already been determined that self-employed workers, as well as professionals in free practice, are subject to the protection of mandatory general insurance, as related entities; however, this would not be fulfilled.

The IESS reform reduced the disparity between those who contribute for decades and those who apply the ‘creole vibrancy’ of contributing for a few years at a high salary to secure a good pension

The coordinator of the Commission, Augusto de la Torre, indicates that ” freelancers of this new world they don’t want to join”. Although they do not have precise statistics on the number of self-employed workers, they know through the National Bureau of Statistics and Censuses (INEC) and other data that it is a growing percentage of the workforce and that it is a manifestation of changes in the workforce, the natural labor market in a world with technological changes, digitization .

“They graduate and don’t want to work for a boss and are their own bosses, dentists, accountants, architects, engineers, they start their own companies,” said De la Torre during the presentation of the proposal in Guayaquil on Thursday July 6, at the University of Espíritu Santo.

Currently, eight active taxpayers are needed to support retirees and there is no such amount, but five per member, but in a few years there will be four or less, according to data from the Social Security Study Table.

IESS has 3,758,000 branches. According to the population projection formula used by INEC, there would be almost nine million centenarians and millennials, of which 6’290,012 are between the ages of 18 and 39, who could be considered economically active.

The president of the college of Guayas doctors, Jorge Bucaram Záccida, is critical of the proposal for the pension system in general, and on the issue of mandatory membership for self-employed workers, he says that “no one can be constitutionally forced to do anything” and that “there is uneasiness within the medical class, among retirees and associated persons” with that proposal.

The doctor, who has been retired since 2015, considers it necessary to improve care because the exact opposite has happened because “there is no improvement, there are no supplies, there are no medicines.”

The commission presented its proposal that the IESS pension system should live for another 50 years

For the national vice president of the General Union of Workers of Ecuador, Eduardo Ortega, “in reality, after so many years, what they will do is reduce the old-age pension. At their discretion, they cannot send workers on board, make us responsible for the government’s crisis”.

De la Torre is aware of the distrust in the social security system and describes it under three reasons: they do not believe that the system will be able to pay their obligations. “We have to convince them that the reform will guarantee or firmly establish the expectation that the system will be able to pay pensions,” he said.

Secondly, they have very variable incomes, one month they get a contract, the next they don’t and therefore they need contribution modalities that adapt to their income patterns, therefore the Commission proposes that contributions to the pension system and the unemployment fund would be similar in the way of paying taxes, i.e. matching at the end of the year without prejudice to the fact that they can make advance payments throughout the year so that they do not have to pay contributions all at once at the end of the year. Then, it is necessary to make it easier for them to pay their membership fees, given that their incomes are irregular,” he explained.

As an example, he stated that if there is a lawyer who earns $8,000 a month, he would contribute on a $6,000 basis. “Unlike dependent workers, we give them the ability to contribute with a limit,” he said.

How much a person must have for a pension in Ecuador according to their age is stated in the reform proposal that entered the public debate

And as a third reason, he pointed out that it should be taken into account that it is neither prudent nor justified to force them to take all the insurances offered by IESS, especially considering that the health systems do not provide the services that people are waiting for. What self-employed workers instinctively do is to take out private health insurance and, with this in mind, propose, and in accordance with Article 2 of the Social Security Act, contributions to pension, disability, old-age and death insurance and to the unemployment fund, which is a savings fund for old age .

Likewise, if they show that they have private health insurance, they will not be required to enroll in the health insurance offered by Social Security.

In this context, he called on them to understand and trust that the pension system will work, and that they will still have to enroll, and he also pointed out that they should also prepare for old age.

The president of the college of doctors Guayas pointed out that proposals for social security reforms have been going on for more than 30 years, that a national consultation was even held and then, as he stated, “people said no to the privatization of social security.

It refers to the one in November 1995, when a public consultation was held and within the framework of eleven questions, one related to social security was asked. “The right to choose the social security system. Should a provision be incorporated into the political constitution that says: “Every person has the right to freely and voluntarily choose to have the social security regime, as well as its benefits and services, be entrusted to the Ecuadorian Social Security Institute or some other public or private institution?” social security will be based on the principles of solidarity and free competition. But”. And then he won no. (AND)