They seek to do business with
the money of the insured

by the Popular Democratic Movement (MDP)

In their most recent attack against public, universal, solidary and comprehensive Social Security, the economically dominant sectors, through a group of supposed experts linked to the leaders of the business groups, have proposed as a false solution to the problems of the Program of Disability, Old Age and Death (IVM), to transfer all insured persons to the individual account system.

No to misery pensions

According to this, the contributions of the people who are in the solidarity program would not be credited with any interest, and their contributions would lose a lot of value due to the continuous increase in prices over the years. In this way, employees’ rights are violated with the individual account. This, in itself, would mean misery pensions for the insured, because these individual accounts would only give the right to pensions much worse than the current ones.

We reject the theft of funds from the insured

Furthermore, given the effect of Law 51 of December 27, 2005, which left the solidarity system practically without funds, the CSS would not have the resources to contribute money to individual accounts. Most likely, the government would deliver some form of debt that, as CERPAN was, that could be sold in the market to supplement the amounts that the institution can contribute. Given the pressure of international financial organizations – whose interest is the contraction of spending, especially social spending — it is expected that this contribution would be insufficient. This bond -type debt would be sold on a market with great speculation — as in the stock market — as happened with CERPAN, and lose a good part of its value.

It’s robbery in the style of the Pinochet dictatorship

This proposal of individual accounts means applying in Panama the mechanism that the bloody military dictatorship of Pinochet used. That nefarious system in Chile caused massive civic protests due to the damage it caused to workers in that country.

Projected effects of individual accounts

To assess the proposal of the economically dominant sectors in Panama, it is convenient to point out that the presidential commission appointed to study the case of Chile by that country’s former President Bachelet, reached the conclusion that around 80% of Chilean retirees will receive pensions below the minimum wage. That same commission concluded that 50% of pensioners will, between 2025 and 2035, receive pensions equivalent to only 15% or less of their average salaries in their last 10 working years.

They intend to privatize the funds and divide Seguro Social

The proposal to generalize individual accounts is related to the business leaders’ initiative that seeks to divide the CSS in two, with an institution dedicated to health and another to pensions. In the case of pensions, it is about handing over the administration of the old age, disability and survivors programs’ (IVM) funds to private companies. It is worth noting that the Chilean pension reform of individual accounts determined that wage earners should contribute 3% of their salaries as a management fee to the private administrators of the pension fund.

It’s urgent to return to the solidarity system

Faced with this very serious proposal, the IVM Board of the Alternative Forum rejects any attempt to turn the entire pension system into individual accounts, as well as to divide the CSS in two. We call for the return to the solidarity system. We will present our proposals for this, demonstrating how this alternative can be fair and viable.

No more impoverishment of the population

We call on all social organizations and the general public to categorically reject this new attempt by the economically dominant sectors and the current administration. Its application will only impose a new, heavy, and unnecessary burden on the country’s working population.

Contact us by email at fund4thepanamanews@gmail.com

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