The financial sustainability of the pension system of the Ecuadorian Social Security Institute (IESS) is one of the most important challenges facing the government of Guillermo Lass through the interdisciplinary commission formed on January 10 and which has received contributions from the various sectors with which it met to prepare a proposal that will later lead to a reform of the law.

The commission is making progress in hearing proposals for the reform of the IESS pension system

Augusto de la Torre, a former official of the World Bank, who will manage this commission for four months to prepare the proposal, has already given some indications of the plan: prepare a document outlining changes in the parameters and management of pensions, to try to pull social security out of actuarial insolvency that would in the short term could become a serious financial problem that the health care system is currently facing.

Retirement

In this year 2023, the pension fund has a projection of 5,696 million dollars, which means an increase of 8% compared to the previous year, because the optimistic expectation is that it will have an increase in beneficiaries this year.

But is this money for immediate use? According to the diagnosis of the World Bank, more than half of the more than 5000 million dollars is invested in mortgage loans and government bonds that will not be paid off in the very short term, and therefore the lack of liquidity suggests that this pension fund would have only a few years to live. In addition to the fact that the contributions of the IESS branches are lower than the payments of pensioners’ benefits. It is a worrying fact that currently there are only five contributors for every pensioner. In 2010, there were 200,000 pensioners, and now there are 500,000.

The social security reform project promoted by pensioners would have a free hand in the Parliament

What is now expected is that this reform proposal, which will not be binding, is the result of technical initiatives, consensus and that it has a political opening in the National Assembly, where it must be discussed, approved or rejected without the intervention of electoral bodies. interest. , but that of related companies. (OR)