The board of directors of the Ecuadorian Institute of Social Security (IESS) approved the release of $1.410 million of Biess funds this year to be able to adhere to all benefits for its members: pensions, health care, professional risk coverage, among others.

IESS costs of the compensation fund amounted to $9,827.1 million. However, the income to cover this cost barely reaches 7,705.9 million dollars. Which already represents a deficit of 2.121 million dollars. To cover this gap, $711 million will come from financing and $1,410 from the sale of Biess funds that would be used to provide unsecured and mortgage loans to members.

This can be verified in Resolution CD 668 of the IESS from the end of December 2023. The information was confirmed to this newspaper by Richard Gómez, the representative of the labor sector before the Board of Directors of the IESS, who explained that this budget was approved. Consider that Social Security requires about $3.706 million from the state in statutory contributions, but only $2.218 million is included in the state’s general budget, so the $1.487 million difference would be mostly covered by the Biess property termination.

The budget clarifies that this disinvestment will be implemented if the state adheres to the payment of the amounts determined in the General State Budget for 2024, which already has an impact on the reserves of the investment portfolio managed by IESS Bank.

However, in the event that the Ministry of Economy and Finance transfers a lower value, the Ecuadorian Social Security Institute will be forced to resort to even greater disinvestment than budgeted, “which would seriously threaten the sustainability of the institution’s compensation funds, the reserves of the investment portfolio managed by Biess,” it said. .

The problem is compounded when you consider that in 2023 the Government had to pay $2,154 million for the 40% pension contribution, but by December 31, 2023 only $832 million had been paid. That is, 1.322 million dollars less was canceled in this area alone. Also pending were $4.7 million of 40% labor risk and $29 million of peasant social security. That is, it did not meet the budget.

The decision also indicated that with regard to the accumulated debt from previous years until 2023, which the state maintains with IESS, for 40% of pensions and other items, after the final records of the accumulated debt signed between the State and IESS are available, the general director IESS must manage all relevant and necessary actions, in order to agree payment mechanisms and deadlines, and to reflect them in the inter-institutional payment agreements, which must start to be implemented within the financial year 2024.

In the case of debt accumulated from previous years until 2023, which the state retains according to the IESS for medical care from the General Individual and Family Health Insurance, the general director of the IESS must also carry out all the necessary procedures.

On this topic, the president of the IESS Board of Directors, Eduardo Peña, reported that the payment for real estate is being negotiated with the Ministry of Finance. He even talked about a list of assets that would already exist. The assets are also planned to pay the debts that IESS has to private lenders.

The president of IESS also clarified that he wants to implement a structural reform that will enable the sustainability of IESS in the future and that will correct distortions in pensions. It will reach the National Assembly in eight months. In addition, efforts are being made to facilitate the payment of the employer’s arrears with a repayment plan of 84 installments (seven years).

The consolidated IESS budget approved in the last days of December 2023 reaches 10,223.3 million dollars. For pension insurance it was 6,842.9 million dollars, for labor risks 143.2 million dollars, for health insurance 2,062.1 million dollars, for social insurance of farmers 820.6 million dollars. For unemployment $131.4 million and for general administration $222.8 million.