That the proposal to reform the pension system of the Ecuadorian Social Security Institute (IESS) is as far as possible from any idea of ​​privatization and that it agrees that the state is asked to cancel what is owed to the subject and generate more jobs, so that in return it has more contributors, says Augusto de la Torre, who heads the Commission for Citizens, which has been working on this approach for six months.

However, it is not considered that there is a more fundamental problem in the country’s pension system, the demographic transition, that the number of pensioners is growing faster than the number of contributors, and that this cannot be solved by these actions alone, De la Torre points out, in response to the statement rejecting the proposal United Front of Workers (FUT), which he gave on Thursday, July 6.

Why is it necessary for independent workers to join IESS?

The pension system lives and dies with demographics and it is a variable that no one talks about and it is the one that dominates the system, emphasizes De la Torre: in 2022, most Ecuadorians were between 25 and 30 years old, which means that 30 years ago, Ecuadorian women decided have fewer children or no children at all. “30 years ago, the birth rate fell,” he says.

The economist comments that in another 50 years, the demographic projection for the country is that the majority of Ecuador’s population will be between 60 and 65 years old. “Ecuador’s population pyramid for 2074 looks very similar to Japan’s. Ecuador is aging much faster than we thought. According to IDB studies, what took Europe 50 years to age, Latin America needs 25 years.”

“Faced with the statements of the FUT leaders that there is nothing in the Commission’s proposal that could be understood as privatization, I invited these leaders to read the proposal carefully and they will understand that the proposal is as far away from any idea as possible. privatization”, he confirms.

FUT is asking the state to pay the debt owed to IESS, which it estimates exceeds $24,000 million, as well as the immediate collection of the debts of employers in violation from IESS, the initiation of forced trials and the confiscation of assets.

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

De la Torre indicates that he agrees that the government is being asked to pay outstanding values ​​and that ways must be found to create more formal employment so that there are more connections. “We fully agree with that position and I think it is a common position of the whole society.”

He explains that these actions are good, but not enough, and does not take into account that there is a deeper structural problem. “I would suggest to the leaders of FUT to seek a relationship, a conversation with the actuaries to see that these two proposals are really very good and I agree with them, they are not enough to overcome the big problem. from that, we have a demographic transition, thanks to which the number of pensioners grows faster than the number of contributors every time”.

In this context, the coordinator of the Commission asks the leaders of the FUT: how to face this other reality that is beyond their control, ours and any government’s and in which public policy must adjust our pension and health systems?