Quito. The umbrella organization of Ecuadorian trade unions (Frente Unitario de Trabajadores – FUT) rejects the proposals to reform the state pension system and threatens Ecuadorian President Guillermo Lasso with a mobilization “like in France” if they accept it. This was announced by FUT President José Villavicencio together with other union leaders at a press conference on Thursday.
The pension reform proposals were drafted by a commission set up by President Lasso in January. Its chairman, Augusto de la Torre, said that the state pension system was not viable in its current form. The Commission envisages a package of measures that would, among other things, increase the number of years of contributions required to retire. The calculation for the amount of the pension payout is to be expanded from the current five years with the highest payments to thirty. Due to the high proportion of informal work in Ecuador, it is much more difficult for dependent employees to achieve the required number of years of contributions.
According to De La Torre, the current system makes it too attractive that people only join a few years before their own retirement and then collect large sums of money. Even more serious, according to De la Torre, is the demographic change, which would take place much faster than expected in Latin America and Ecuador. This has led to the fact that currently only about five contributors per recipient can be expected instead of the required eight. In a few years, it could even be four or fewer.
Ángel Sánchez, general secretary of the Confederación Ecuatoriana de Organizaciones Sindicales Libres – CEOSL, one of the country’s main trade unions and a member of the FUT, replied that the real reason for the system’s problems is that the government is running out of debt failed to pay US$24 billion to the Social Security Institute (Instituto Ecuadoriano de Seguridda Social – IESS), which runs the state pension system. The CEOSL accuses the commission that its proposals aim to “destroy the rights enshrined in the constitution and in the social security law, which affects members and retirees”. The FUT also criticizes that neither employees nor the IESS are involved in the commission.
It is not yet known whether Lasso’s government will accept the Commission’s proposals. If Villavicencio has his way, the government shouldn’t make any decision at all, as it is unable to solve the country’s problems and will be stepping down in a few weeks anyway.
After weeks of protests by indigenous organizations last year, corruption scandals, the escalation of violence in the country and a dispute between the government and parliament, President Lasso has lost enormous support. To avoid being ousted, he dissolved the National Assembly in May, which will automatically lead to new elections in August. Lasso then no longer wants to compete.