The Labor, Health and Social Development Commission of the National Assembly of Deputies held a second debate on the executive’s bill modifying it, committing the State to make additional economic contributions, by eliminating the increase in the retirement age, arguing that revenues could be improved by reducing tax evasion. 'I do not see at least in terms of the IVM that they have contributed anything clever to generate the necessary income, since better revenue should solve other social problems, for example, lack of drinking water,' expressed an expert.
There is concern that all sectors have focused on rejecting the increase in retirement age, rather than demanding the financial security of pensioners and the long-term sustainability of the system. 'The first means the ability of the pension to cover needs and the second that the system endures over time,' stated an analyst.
While medical unions propose returning to the pay-as-you-go system to improve pensions, they do not offer a sustainable solution without modifying parametric measures. On the other hand, workers want the State to assume the entire financial burden, while Deputies seem more concerned about the political cost that any decision implies.
Despite the executive presenting a sustainable system model, there are doubts about whether it meets the principle of financial security for pensioners. Although it is expected that new pensions for contributors will be higher than those of the mixed subsystem, they may not be compared to the exclusive defined benefit.
To improve pensions, it would first be necessary to address structural problems in the Panamanian economy, such as better wages, job stability, reduction of informality, and labor market growth. Until these aspects are resolved, cooperation from all parties, including the government, employers, and workers, will be required to ensure the sustainability of the pension system.
