Within eight years, more than 1.3 million Dominican workers will reach retirement age with pensions far below what is necessary to sustain oneself with dignity, warned the specialist in social security Arismendi Diaz Santana.
- The stage, which Díaz Santana qualifies as a “time bomb“, requires a urgent reform of the system pensions for reasons of justice and to avoid impacts on the social and fiscal stability of the country.
He explained that the delivery systemtoday in decline, had a boom in the past in which it accumulated reserves and generated good returns. However, the depletion of its funds and the drop in the proportion of contributors per pensioner made it untenable.
The model of individual capitalization also faces serious limitations that, if not corrected, will condemn the majority of workers to pensions very low. Among the factors that affect the current system, he cited the reduction of the original contribution from 12% to 9.97%, the lack of a recognition bonus for former IDSS members, the increase in life expectancy, the high AFP commissions, the labor informality and the lack of inclusion of self-employed workers.
Measures
The Social Security Foundation for All proposed to the Bicameral Commission congressional eight measures to correct these distortions: increase the contribution to 11.2%, expand the Social Solidarity Fund, reduce the AFP commission, guarantee the indexation of the pensionsinclude migrants and self-employed workers, and ensure health insurance for retirees.
With these adjustments, the current level of the pensionsgoing from a average replacement from 35% to 75%, and a basic pension would be guaranteed to those who fail to comply with the required years of contributions. Díaz Santana stressed that the country must act now to avoid a forecast collapse imminent.
