Franco Pacheco, President of the Union Costa Rican Chamber of Commerce and Associations of the Private Business Sector (UCCAEP) presented a proposal to expand the base and make the access to the Invalidity, Old Age and Death (IVM) regime of the Costa Rican Social Security Fund (CCSS) more flexible for 800,000 workers who aren’t currently listed.
The representative of the business sector gave his impressions before the “adjustment” experienced by the CCSS pension system, in a forum organized by the fraction of the Christian Social Unity Party (PUSC) in the Legislative Assembly.
The pension manager of the CCSS, Jaime Barrantes, Rodrigo Arias López, actuary of the University of Costa Rica (UCR), Albino Vargas, secretary general of the National Association of Public and Private Employees (ANEP), and Gerardo Vargas Rojas, chief of red-blue bench, also participated in the forum.
According to data from the actuarial study carried out by the UCR on the current status of the IVM regime, in 2015, 812,268 people were counted in the economically active population, but they do not contribute to the CCSS.
Arias said that 14% of that number, (314,416) are people under 50 years old who work in informality.
The main source to improve the IVM is to expand the base of participants, this is a distribution system. When it began in 1947 we had 32 people contributing for each pensioner, today we have 6 taxpayers for each pensioner. If we can create tools to include that 43% that is working in informality and contribute, we’ll manage to balance the system,”
said Pacheco.
On that possibility, the pension manager of the CCSS recognizes that the institution faces a challenge to expand coverage.
For the time being the CCSS insists that the regime is not in crisis, but in a process of change and therefore stresses that it applies a “sustainability roadmap”, and it has taken measures in the short and medium term, including the elimination of early pension, increases in the contribution of the State, the possibility of investing in securities and the improvement in the collection management.
Vargas reiterated the need to conclude a national dialogue on the subject of pensions. In that sense Pacheco demanded the Executive Power to have the proposals ready in four months.