Solvency of Panama's Social Security System

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Businesspeople reject contributions from the Panama Canal to Social Security

Mon, 08/13/2018 - 17:27

The Chamber of Commerce, Industries and Agriculture of Panama (CCIAP) today rejected a legislative proposal so that part of the contributions from the Interoceanic Canal can be used to "solve the financial problems of the Social Security Fund (CSS)", which according to several studies is led to a collapse.

In the opinion of the CCIAP, which brings together more than 1,600 companies from 15 economic sectors of Panama, it is "unjustifiable that it is intended to solve the failures of the care institution (...) charged to resources that (...) are intended to the attention of the priority needs of all Panamanians."

The union recognized "there is no room for discussion on the need for periodic adjustments in retirement," but warned the solution to the crisis that Social Security faces for years is not included in "the adoption of targeted populist measures, among other purposes, to influence the development of the general elections of 2019."

For years, "studies warned of problems that, sooner rather than later, would end up affecting, in unpredictable terms, the liquidity of the CSS programs, and everything indicates that instead of addressing the situation in a fair magnitude," we now choose the political engineering of populism to treat, with simple palliatives, a terminal disease," said the CCIAP.

He recalled "this is not the first time that attempts have been made to sink the tooth into the contributions of the Canal, but always the attacks have been firmly rejected by Panamanians, aware that these resources cannot have different recipients to all of them".

First of all, the CCIAP warned on Sunday in a public statement "of the serious risk it represents for national interests to finalize the bill aimed at solving financial problems of the Social Security Fund (CSS) with funds from the resources that are contributed by the Panama Canal to the state."

 

http://www.panamatoday.com/panama/businesspeople-reject-contributions-panama-canal-social-security-7552

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Radical solutions needed for Panama social security

Posted on August 26, 2018 in Panama

 

CSS Health entity should have separate board says business group

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Panama’s Chamber of Commerce, Industries and Agriculture (Cciap)  is calling for radical action to tackle the country’s social security problems.

It regrets the lack of actuarial studies to give an accurate “panorama” on the financial realities of the  Social Security system (CSS).

“We reiterate the need to analyze the separation of the entity in two: One part  dedicated to the provision of health services and another to the administration of pension programs; both with independent  different boards, specialized in the issues that concern them while considering the best global practices of corporate governance to achieve efficient management”  says  a statement released on Sunday, August 26

According to the Chamber, there is a general coincidence of criteria in that in the next five years Panama has a final opportunity to carry out – within democratic parameters, stability, and peace – the necessary transformations to consolidate progress and collective well-being, in terms of participation, inclusion and social justice. In that context, the health system and social safety “is one that we cannot let go”, it concluded.

 

https://www.newsroompanama.com/news/panama/radical-solutions-needed-for-panama-social-security

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OPINION: Looming financial bombshell

Posted on August 26, 2018 in Panama

 

Lawmakers blind to the problem

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IN the year 2016, the Social Security Fund paid $509 million in pensions and retirements. In contrast, the contribution in installments that year was just one $1.302 billion. To this are added contributions that the State pays annually to reinforce the finances of the defined benefit subprogram of Disability, Old Age, and Death (IVM).

At the current rate, the $3.980  billion held by the IVM in reserves – and with less income and more expenses every year- will be exhausted in 2025, that is, seven years from now. This is not a surprise; but  the result of a decade lost with the last two governments, which refused to act responsibly with the contributors. Increases were approved for pensioners and retirees while avoiding informing the population about the true actuarial status of the entity. This is the most serious threat to the Panamanian economy and public finances.

Against the background of economic instability that thousands of retirees and will face it is obvious that this must be a priority issue for the aspirants to govern this country. The irresponsibility and demagoguery of committing the future to the mismanagement of the present and the exasperated clientelism, they have turned into cancer that persecutes every one of us. This is the time to be responsible and make serious decisions. … LA PRENSA, Aug.26

 

https://www.newsroompanama.com/news/panama/opinion-looming-financial-bombshell

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Businesspeople urge a total reform to social security in Panama

Sun, 08/26/2018 - 21:53

Panama's businesspeople urged today a radical reform to the Social Security Fund to avoid the collapse of the system, and said the next five-year period is the "last opportunity" to carry out that process within democratic "stability and peace" parameters.

The Chamber of Commerce, Industry and Agriculture of Panama (CCIAP), which brings together more than 1,600 companies from 15 economic sectors, reiterated its proposal that the administration of the Social Security Fund should be divided into two independent parts: one for health care and another for pensions.

This structural reengineering, which has been "delayed by successive administrations" leading the Social Security Fund to the "complex situation it faces", must be undertaken by the government that will take office in Panama in May 2019 for a five-year period, said the CCIAP.

"There is a general overlap in the criteria that in the next five years Panama has a final opportunity to carry out - within democratic parameters, stability and peace - the necessary transformations to consolidate progress and collective well-being, in terms of participation, inclusion and social justice, and the Health and Social Security System is one that we cannot let go," it argued.

The CCIAP regretted the lack of progress of "a national dialogue that seeks permanent solutions to the problems" of Social Security, and stressed "the lack of actuarial studies thwarts an accurate picture of the financial realities" of the agency.

Although there are no updated figures, the Panamanian Government has admitted that the finances of the Disability, Old-Age and Death (IMV) program are weakening each day due to the increase in the number of retirees and pensioners and the decrease in contributions.

The International Monetary Fund (IMF) recommended in Panama reforms in 2016 to address the depletion of its pension fund, scheduled for the next decade, according to official sources.

Last May, Panamanian President Juan Carlos Varela appointed Luis Carlos Pimentel as the third actuary of the Social Security Fund.

"The Actuarial Technical Board must consider the economic, social and biometric factors that condition the development of the social security system, the life expectancy according to the national mortality tables", among other studies, on the basis of which it must present a report (...) on the actuarial situation of the Disability, Old Age and Death Regime," the Government said.

 

https://www.panamatoday.com/panama/businesspeople-urge-total-reform-social-security-panama-7677

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Unions urge employers to fight default and evasion in Panamanian Social Security

Fri, 08/31/2018 - 16:13

Teachers and workers' unions in Panama today rejected the proposal to separate the administration of health and pensions in the Social Security Fund presented by the business community, which they urged to combat the default and evasion of the payment of fees that affects the public health entity.

Members of unions of university professors and workers from different sectors protested peacefully before the headquarters of the Chamber of Commerce, Industry and Agriculture of Panama (CCIAP), which promotes the idea of a reengineering in Social Security in the face of the financial crisis that affects the institution for years.

The approach of the CCIAP, which brings together more than 1,600 companies from 15 economic sectors, is that the administration of the Social Security Fund must be divided into two independent parts: one for health care and the other for pensions.

"It does not make sense, all the programs of the Social Security Fund are born from the employment relationship, they all imply two things: the financial part and the medical benefit", so they cannot be separated, said the university professor and former director of the health organization Juan Jované.

Jované said the peaceful protests against the private sector's proposal on Thursday was backed by a broad social platform, and said if employers really want to help Social Security, they should launch a campaign against "evasion and default" in the payment of worker-employer fees.

"We remind" the businesspeople affiliated to the CCIAP, that "there are 38,000 defaulting employers with the Social Security Fund, which owe 236 million dollars" to the health agency, Jované told reporters.

He also stressed that "there are 105,000 workers" in Panama "classified as informal workers of the formal enterprise, which is a contradiction."

There are "105,000 Panamanians and Panamanians who have the right to social security and employers do not give them any work contract, nor enroll them in the Social Security Fund," he added.

In a public statement last Sunday, the CCIAP insisted that the Social Security Fund must be radically reformed to avoid the collapse of the system, and that the next five-year period is the "last opportunity" to carry out this process within parameters "of democratic stability and peace".

The CCIAP considered that the structural reengineering of Social Security has been "delayed by successive administrations" taking it to the "complex situation it lives".

Although there are no updated figures, the Panamanian Government has admitted that the finances of the Disability, Old-Age and Death (IMV) program are weakening each day due to the increase in the number of retirees and pensioners and the decrease in contributions.

The International Monetary Fund (IMF) recommended in Panama reforms in 2016 to address the depletion of its pension fund, scheduled for the next decade, according to official sources.

 

https://www.panamatoday.com/panama/unions-urge-employers-fight-default-and-evasion-panamanian-social-security-7732