The debate on the pension fund reform proposal is ongoing. Your debate cannot be postponed, and in order for it to be successful, we agree on three things:

We must restore financial sustainability to the IESS pension fund, and that as soon as possible. Decades of warnings, public consultations, proposals and debates have not changed the course of the IESS pension fund towards insolvency, which today seems close. The validation of the pension fund reform proposal should be a national goal, which can overcome the current political polarization; a goal worthy of uniting us again after the sentence “Not a step back!”, which former President Durán-Ballén used to unite victorious Ecuador in 1995.

Second, let’s evaluate this proposal, improving, if possible, what would cause the greatest resistance to change. The most visible changes are not very sensitive. We are not facing a privatization reform; nor does it affect the pensions of current retirees or the vested rights of those who have qualified for a pension under the existing system. It also does not include changes to the contribution rate or the minimum retirement age and only limits tax contributions to the pension fund.

What changes would cause resistance? The years of contributions required to retire are increasing; as well as the number of the best years of income that serve as the basis for pension calculation. Special regimes are abolished: of the five existing ones, Seguro Campesino and the system of unpaid domestic workers would remain. In addition, half of the reserve fund is converted into forced savings for two to three years, and formal self-employed workers must join the disability, old age and death system and the unemployment fund. They are conditions that can be assimilated.

With the low levels of resistance it should cause, its expected effect deserves to be discussed with a constructive attitude. The proposal would make the disability, old age and death system financially sustainable. In addition, the tax subsidy would go to a greater extent to the poorest, because it refers to the basic part that the new pension would have. Finally, the sufficiency of the old-age pension will be supported by the basic pension (for those with low and middle incomes) and savings (for those with middle and high incomes).

Third, let’s create the missing part of the design: without institutional agreement or organizational strengthening of the responsible entity, there is no successful strategy. An institutional agreement must regulate the necessary rules of the game (roles, obligations, powers) between the political entities that approve and regulate the reform (Executive Power, National Assembly, branch representatives, etc.). Then, it is essential to transform and strengthen IESS as an organization in charge of managing the new design of the pension fund, since it is urgently necessary to innovate its key functional strategies (operations, technology, portfolio, etc.), its organizational structure and operational systems, to a new level of reliability, efficiency and effectiveness. Let’s win together again. Not a step back! (OR)