The Social Security Fund (CSS) headquarters at Clayton’s Building 219.
It’s bound to be controversial
Tomorrow night — Thursday, September 19 — at 6 p.m. President Mulino will address the nation on all television broadcast networks and streaming online at several places to talk about the Social Security Fund.
Panama has a unique accounting system in any case, but within that there are big disagreements over whether and to what extent there is a financial crisis in the Caja de Seguro Social. (Social Security Fund.) This institution more or less runs the nation’s public pension fund, with a 2005 partial privatization putting much of its savings into private banks in individual account in beneficiaries’ names. The fund also runs a major part — alongside the separate Ministry of Health — of Panama socialized health care system. (Private medical services, clinics and hospitals also exist alongside the dual public system.)
One major issue with any sort of public safety net in Panama is that about half of the working population is in the informal economy, which tends to be low-paid and contributing to neither taxes to the government’s general fund nor contributions to the CSS. Those who make than just over $1000 per month or less, in any case, have not been required to keep records or pay taxes.
Mulino met with business leaders, first of all the National Private Enterprise Council (CoNEP), and later with many but not all of the interested parties. His appointee to head the fund, veteran private insurance executive Dino Mon, was barely ratified by the National Assembly with the large Vamos independent bloc voting against him and many deputies from various parties arranging to be absent during the vote. In years past Mon has advocated “parametric measures,” that is, some combination of raising the retirement age or increasing the number of payments into the system over the years for someone to qualify for a pension.
Various forms of theft have dogged the system for many years. These, most commonly, are employers deducting CSS payments from workers’ paychecks and just pocketing the money. Mon has characterized such accounts as “uncollectable debts,” but they would accrue to some members of the wealthiest families in Panama and companies or their successors with substantial assets. Panamanian corporate and banking secrecy laws make it easier to launder or conceal such assets.
The major labor unions and politicians of various parties have declared their opposition to “parametric measures.” HOWEVER, given the post-invasion history of Panamanian politics, a semantics shell game about what parametric measures include and crude deceptions about “consultations” or “agreements” would not be big surprises.
Organized labor and working Panamanians in general have been less tolerant of the usual games in recent years, which puts José Raúl Mulino in a position to inflame the situation with what he says, or to cool passions about Social Security with the content of his speech.
Contact us by email at / Contáctanos por correo electrónico a thepanamanews@gmail.com
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