LatinNews Daily - 18 October 2024

*Unions in Panama have staged protests in Panama City against proposals to overhaul the disability, old age, and death benefit system (IVM) of the state social security system Caja de Seguro Social (CSS) proposed by the prominent private sector lobby Consejo Nacional de la Empresa Privada (Conep). Last month Panama’s President José Raúl Mulino announced plans for a major reform of the CSS, a longstanding problem for successive governments, with the launch of a dialogue table involving “all sectors” to discuss proposals. Unions such as the Confederación Nacional de Unidad Sindical Independiente (Conusi) and Consejo Nacional de Trabajadores Organizados (Conato) are calling for the IVM’s defined-benefit pension subsystem to be maintained. However, Conap is calling for it to be changed to include additional elements such as an obligatory savings component and a component whereby individuals would make voluntary contributions which would be obligatory for employers – proposals similar to the Sistema de Ahorro y Capitalización de Pensiones de los Servidores Públicos (Siacap), a defined contribution pension plan for most public sector employees. In September 2023 international credit rating agency Fitch Ratings warned that the “growing imbalance” in the defined-benefit pension subsystem “continues to be a key medium-term risk that could also potentially worsen Panama’s debt burden”. Social organisations have until 31 October to present their proposals for the CSS reform.