The unpopular changes analyzed by the Caja de Profesionales

After taking over in December 2021, the new Directory of the Retirement and Pension Fund for University Professionals (Cjppu) it’s found Finalizing details to present to the Executive Poweron the one hand, urgent measures to overcome the deficit in the short term and, on the other, structural measures that give viability to the institution.

The new directive encountered a Cjppu in critical situation as you cannot meet your monthly obligations and, if there are no changes, would arrive without reservations to the year 2024. According reported the weekly Searchthe technical services of the Cjppu estimate that there will be “increasing deficits” for all years of the period: from US$55 million in 2022 to a red of between US$112 million and US$118 million by 2026.

The new president of the Cjppu, Virginia Romerohad announced at a press conference on the day of his inauguration that to deal with this situation there will be no other alternative than raising the retirement age as well as adjusting the way of calculating basic pensions, among other options.

There are measures that the Board of the Cjppu hasne power to take immediately. However, there are others that require parliamentary approval since they imply changes in the Organic Law of the boxwhich can make your concreteness have more delay.

“We are analyzing the contribution that each of the institution’s groups has to make and trying to reconcile the numbers. What is certain is that they are not going to be nice measures, we know that, but we came here to make the decisions that have to be made because the box comes first and there are not two positions in this”, assured Romero to The country.

Retirement and Pension Fund for University Professionals (Cjppu)

The urgent measures

Search reported that the Directory has on the table four measures that would not require parliamentary approval. First, repeal health benefit exceptionsexcept for beneficiaries who have a “favorable court ruling” and those who are linked to situations of disability or medical provisions.

Second, repeal the additional increases in liabilities of 2.5% and 3%. Third, eliminate the contribution bonus for professionals who have a common retirement cause but who continue to be active.

In bedroom placethe Board analyzes the option that those people who declare not to exercise pay once a year the equivalent of 10% of the ficto of category 1, which is about $ 4,279. In turn, they propose obligation to renew the affidavit of non-exercise every two years but that requires parliamentary initiative.

Measures requiring parliamentary approval

Search stated that one of the measures proposed and that will require parliamentary discussion is that of increase the contribution rate by two percentage points, going from 16.5% to 18.5%.

In turn, it is suggested that there is aliability contribution” that has characteristics similar to the Caja de Jubilaciones y Pensiones Bancarias (CJPB), but equivalent to 70% of what is contributed there. In addition, it is proposed theincrease” of what is raised through “indirect resourcesas they are, for example, professional ringtones.

According to the studies carried out by the technical services of the Cjppu to which Search agreed, in the case of applying the measures that the Board of Directors of the box proposed and the current net flow is considered plus the product of the investments of the measures, the deficit would fall, in 2026, to just under US$13 million, in a moderately optimistic scenario.

The unpopular changes analyzed by the Caja de Profesionales

Retirement and Pension Fund for University Professionals (Cjppu)

Structural reform and long-term measures

Romero told the newspaper The country that long-term measures They will begin to be negotiated within the Board of Directors after the authorities present the urgent solutions to the Executive.

“The fund does not have time, the Ministry of Labor and Social Security (MTSS) is waiting for us to present the measures that we propose and that is where we started to meet, they are waiting because we are the ones who have to tell them how we are planning for survivalRomero pointed out.

Among the main measures that the Board is analyzing in the long term -which will begin to pay off between the fifth or sixth year onwards-, Romero pointed out that the minimum retirement age will be raised, there will be changes in the replacement rate, modification of the fictitious salary scales or even change the contribution system will be evaluatedas well as indicated that there may be changes in the method of calculating the basic retirement salary.

In this context of crisis that the Cjppu is experiencing, the previous directive, headed by Gonzalo Deleonpresented a list of measures to deal with the crisis. One of those measures was ask for a loan from the state, that the government rejected.

When asked about the possibility of requesting a loan from the State, Romero said that Although they want the box “to be self-sustaining” that “does not depend 100%” on the current directive.

“Since the measures have to be negotiated with the Executive Power and then with the Legislative today we cannot say if we are not going to need state support. Our proposal is not considering loans to the Executive Power. Today is not a proposal but perhaps we are missing something to reach the last year”, he estimated.

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