He the unemployment fund, which currently reaches 10,150 million dollars, the largest savings fund in the country, will become ua mandatory savings fund for the age of members of the Ecuadorian Institute of Social Security (IESS). These resources, which are currently viewable on each contributor’s individual account in IESS, cannot be withdrawn until the contributor withdraws.

This fund will maintain current contribution rate of 2% of earned income and pensioners will be able to use their funds in the unemployment fund as collateral for mortgage loans. This was explained by Andrés Hidalgo, a member of the Interinstitutional Commission that prepared the proposal to make the IESS pension fund sustainable over time.

According to Hidalgo, given that this fund was the one that helped people when they lost their jobs, it is proposed that those who are unemployed can instead use the unemployment insurance, which still exists, but will be more effective .

Under this new scheme, the idea is to improve unemployment insurance to make it faster and better utilized. For example, instead of 24 months of contributions, only 12 months of contributions are required so that the benefit can be realized in a more timely manner.

Thus – according to the proposal – the design of unemployment insurance is changed in order to separate it from the unemployment fund and bring it closer to the standards proposed by the International Labor Organization (ILO). In this sense, the following amendment is proposed:

In this sense, according to the proposal, after an actuarial and stress study, the parameters of unemployment insurance will be determined and it will be decided whether it is possible to provide access to the unemployed through voluntary resignation and self-employed workers.

New a mandatory savings fund for old age would be the first step or germ of savings which will be of two types: mandatory and voluntary.

Additionally, money from the reserve fund I can’t be monthly anymore as the government of Rafael Correa decided at the time, but half must also be saved on a mandatory basis. In addition, a medium-term savings plan is drawn up, half of the contribution to the reserve fund is mandatorily deposited in a savings account for two or three years.

Within this scheme, the worker selects a financial entity (including the Bank of the Ecuadorian Social Security Institute, Biess) in which to make the deposit, and if the worker does not select, his contribution automatically goes to Biess.

According to IESS data, the current provision of unemployment insurance It consists of delivering a sum of money to a member or associate who is unemployed. It is financed with a 2% monthly employee contribution.

Until February 2016. The amount of the severance pay is financed with 3% of the employee’s monthly contribution, and since March 2016 it has been financed with 2% of the employee’s monthly contribution.

In order to be able to access this benefit, several conditions must currently be met:

However, when the employee retires, he has the right to withdraw the accumulated amount of severance pay, without the need to comply with the sixty-day waiting period.

This fund is currently being returned to those who have taken paternity or maternity leave. This fund is also automatically returned to voluntary affiliates. When an insured person of any age dies, the accumulated severance pay is returned, exclusively, in accordance with Article 285 of the Social Security Act.