The President of the Republic, José Raúl Mulino, has enacted Law 462, which introduces modifications to the Organic Law of the Social Security Fund (CSS) in Panama. This new legislation, approved by the recently installed National Assembly, maintains the retirement age at 57 years for women and 62 for men.
After an extensive process of citizen consultations in different regions of the country, the New Assembly fulfilled its role by delivering a new social security law that promises better quality care and retirement for Panamanians. A consensus was reached on part of the original text presented by the Executive Body in November 2024, and subsequently, contributions and agreements were made among the various legislative factions to create a unified text that benefits the entire insured population.
The law establishes the creation of the Unified System of Solidarity Capitalization, backed by a Unique Solidarity Fund. This system has two components for pensions: the Non-Contributory, which guarantees a minimum pension of $144 or a solidarity pension calculated based on the contributions of the contributor; and the Contributory Component of Solidarity Capitalization, which grants pensions according to the contributions accumulated in individual accounts, applying a rate of return subject to the investment policies of the fund.
On the other hand, the law allows the CSS to allocate up to 10% of its investment fund to private entities, reserving the remaining 90% for state banks such as the Savings Bank and the National Bank of Panama. Regarding contributions, from the entry into force of the law, employers will contribute 13.25% of their employees' salaries, increasing to 14.25% between March 2027 and February 2029.
Self-employed workers must contribute 9.36% of their income for the Disability, Old Age, and Death Risk Program (IVM) and 8.5% for voluntary contributions aimed at Health and Maternity risks. The State will complement with a subsidy of $20.5 million annually to offset fluctuations in interest rates and with $25 million annually for Health and Maternity Risks, in addition to an annual additional contribution to cover the actuarial deficit.
It is also established that the State will receive 50% of the contributions made by state or mixed enterprises that generate income from national water resources. The new CSS law guarantees a more solid and sustainable social security system for all insured individuals in Panama.
