The Ministry of Economy and Finance is making its accounts of the payments made by the Government to the Ecuadorian Social Security Institute (IESS) in the last two years, which correspond to the administration of Guillermo Lasso, following letters sent by the IESS authorities stating that the complex situation of the pension fund and the risk of non-payment of pensions due to the growing debt maintained by the state.

The executive responded this Wednesday, September 27, that “in the context of economic challenges, such as declining oil revenues, increasing international interest rates, increasing security costs and mitigating the El Niño phenomenon, the Government” continues to work tirelessly to meet outstanding obligations through timely planning.”

And he assured that his commitment to social security is visible in the $665 million transferred so far in 2023.

State debt to IESS of $10.151 million puts pension payments at risk and weakens fund, authorities warn

IESS noted that the national debt amounts to 10,151.9 million dollars (contributions and healthcare) and that non-payments have been going on since 2012, but they have accumulated even in this government, which stopped paying 1,250 million dollars for 40% of contributions this year alone. The representative of the employers in the IESS Board of Directors, María de los Ángeles Rodríguez, said that they asked to stop the fact that while the Government is late with its 40% contribution, Biess invests in government bonds.

From the Ministry, they reported that the Government of President Guillermo Lasso reaffirmed its commitment to the stability and sustainability of social security and between 2021 and 2023 a total of 4.232 million USD was transferred to the IESS, which is considered a milestone in addressing the historical debts accumulated since 2011 .

This is because he mentioned that prior to the commencement of the current administration, IESS was facing important pending accounts inherited from the previous governments. “In addition to fiscal responsibility and transparency, in 2022, for the first time in a decade, the historical debt was recognized. The current commitment is to pay more than $3.1 billion in 40% of pension contributions and $400 million in audited debts related to health services and VAT refunds that have been carried forward since 2011, as no other government has done. “

As for Biess’s investments in government securities, the state portfolio stated that they are being executed in accordance with its annual investment plan and that the Ministry of Economy and Finance has accurately executed all amortizations of those bonds, and it is predicted that the interest for this year will exceed 700 million dollars.

“Biess manages more than $28.4 billion in assets and is committed to maintaining appropriate and prudent financial management, which includes, in its liquidity scenarios, the possible resource needs required by IESS. To date, Biess maintains excess liquidity of more than $600 million,” he said in a statement.

A meeting of the Council and the Ministry of Finance was expected this week to find a solution.

Letters from IESS to the Ministry of Economy