On April 12, 2016, the FIAP Presiden, Guillermo Arthur, was invited to attend a breakfast meeting organized by the Chamber of Commerce, Industries and Agriculture of Panama (CCIYAP).

The meeting addressed the experiences in pension reforms in the countries of Latin America, the macroeconomic impact and management of fiscal sustainability of these reforms, some alternative reform to the system of Panamanian pensions and experiences in the political context of pension reforms.

President FIAP recommended the Panamanian authorities to opt for State policies for the pension funds of the Social Security Fund (CSS) to be capitalized and managed by a private agency, a change that would solve the pension payment deficit problem. This reform has been carried out in more than 20 countries ‘successfully’ since the PAYGO systems fell into crisis.

In the individually funded pension systems, each worker is responsible for saving for his own retirement. This consists in accumulating funds in an individual account; however, instead of going directly to paying the pensions of others, these savings are invested and the pension of the contributor is paid with the proceeds over the years. The greatest benefit is that the funds saved by each worker will generate interest, as they will be invested in infrastructure, hospitals, housing, roads, ports, bridges and shares of joint-stock companies. It is also an advantage that workers have their money in their individual accounts, and can check and see how it is growing, as if it were a current savings account.