The Uruguayan president, Luis Lacalle Pouspoke publicly against the plebiscite on social security reform which will take place on October 27, coinciding with the national elections. During his speech, the president highlighted the effects that, according to him, would be detrimental if the reform promoted by sectors of the PIT-CNT and of Wide Front.
Accompanied by the Minister of Economy, Azucena Arbelechethe Minister of Labor, Mario Ariztiand Rodolfo Saldainarchitect of the recent pension reform, President Lacalle Pou showed the negative stance of the government coalition against this proposal.
The plebiscitary measure suggests the disappearance of the figures of the Pension Savings Fund Administrators (AFAP), lowering the retirement age to 60 years and equating minimum pensions with the national minimum wage.
A debate in the heart of the Frente Amplio
Within the Frente Amplio, the opposition coalition, the position regarding the plebiscite is diverse. Although his presidential formula, made up of Yamandú Orsi and Carolina Cossestated that it will not promote the use of the ballot, the party has granted freedom of action to its voters. This reflects the diversity of opinions surrounding a reform of great importance for the future of the Uruguayan pension system.
During his conference, Lacalle Pou highlighted the need for Uruguayan citizens to make an informed decision in the elections. He stressed that his government “has respected the constitutional separation” between his position and party politics.but feels an obligation to express concern about the impact of the proposed reform. He argued that his administration promoted a “fairer” and sustainable pension system that addresses unprecedented social equity issues.
The background of the current reform
The president also recalled that during his electoral campaign, promised not to increase the retirement age for those already in the labor system. The new reform, prepared by Saldain’s team, represents a consensus reached after complex negotiations, establishing a gradual transition to implement its new features. The first generation affected will be those born in 1973, which demonstrates the gradual approach to change.
The current proposal, according to the right-wing president, could destabilize the sustainability of the pension system, eventually leading to tax increases or benefit cuts. The possibility of a “confiscation of resources” through the disintegration of the AFAP and the fiscal implications of the reform have been a central part of his criticism. Although it does not anticipate an immediate increase in VAT, it warns of a scenario of fiscal pressures in the future.
