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FIAP > Boletín – Recientes > Progress of the Pension Systems No. 3 – 2020 / April-May 2020

Progress of the Pension Systems No. 3 – 2020 / April-May 2020

7 July, 2020
  • Crisis in PAYGO systems worldwide. In Argentina, the government again funded itself with the ANSES Guarantee Fund, this time for USD 389 million, after more than two months of quarantine and taking on public debt more than seven times. In Ecuador, on the other hand, the Ecuadorian Social Security Institute Bank (BIESS) announced that the funds of Social Security members are four months from zero liquidity. In the United States, a National Academy of Insurance says that the country’s PAYGO system will be in deficit by 2036 if no adjustments are made. This report does not consider the effects of the Covid-19 pandemic, so the deficit could occur even earlier.

 

  • Chile: Government announces second part of the emergency economic plan, which will include two pillars: (i) Family-oriented Pillar through the creation of a US$2 billion fund; and (ii) Entrepreneurs and SMEs support pillar, which consists in financing lines with state guarantees. The Pensions Commission, on the other hand, proposed the creation of a new fund for people close to retirement.

 

  • Colombia: Decree 558 was issued, freezing pension contributions during the months of May, June and July. Thus, the discount, equivalent to 16% of salary, will not be levied on employers and employees. Furthermore, according to the Minister of Finance, Alberto Carrasquilla, the bill of law that sought to authorize the transfer of pensioners from the private pension funds to Colpensiones, finally did not materialize.

 

  • Canada: Lump sum payments to senior citizens are announced. On May 12, the federal government of Canada announced a new tax-free, lump-sum payment of C $ 300 (US $ 216.41) to people eligible for the old-age pension (Old Age Security, OAS), plus an additional C $ 200 (US $ 144.27) for those who are also eligible for the Guaranteed Income Supplement (GIS).

Download the Full Progress of the Pension Systems here.

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