Alfredo Cabrera stated that the objectives of the proposal are not centered on a result that is “impossible to achieve” with the current asset-liability ratio. The president of the board of directors of the Banco de Previsión Social, Alfredo Cabrera, indicated in Informative Uruguay, that the project takes on the problem “with time”, when the situation “is not yet a drama”, and with “responsibility”, since it must ensure compliance with future obligations, “when the demographic context shows us that we will have difficulties to be able to comply with the benefits”, if the current system is not modified. The payment of pension benefits today means 11% of GDP. “Half of that is covered with contributions from the system and the other half, part with taxes and the rest with direct transfers.”
Eliminating this deficit “is not a goal,” said Cabrera, given that “in the current context it is impossible to think of a sustainable system.”
The projections indicate that the trend of the pension system deficit “would be controlled first and then tend to fall.”
Cabrera vindicated the project that today is submitted to the consideration of the parties. He stated that with the reform, the five lowest income quintiles would benefit from the reform and would start to receive more at retirement, he stressed.
In another order, the president of the BPS recalled that the passage of thousands of contributors who decided to leave the AFAP through the opportunity given to the “fifty”, does not imply changes in the finances of the institution.
In March 2021, the three-year period that had been provided for in Law 19,590 expired for the so-called fifty-somethings to leave the mixed social security regime. Some 31,000 people chose to leave the AFAP system and go on to contribute only to the Social Security Bank (BPS), and then collect a single pension from the state agency.
The hierarch recalled that the savings of disaffiliated workers are transferred from the pension fund administrators to a Social Security Trust.
Said trust will be in charge of transferring to the BPS the assets and the accumulated profitability, gradually, starting from the sixth year of being constituted, and during a period of 20 years, to partially finance the benefits that must be paid to these contributors.
