Important international analysis firms have also warned that the government is moving to nationalize workers’ money, which since 1998 has been dealt with in personal accounts.
President Najib Bukele announced on September 15 that he would present within 30 days a reform proposal promising better pensions for Salvadorans at a time when the country is going through a financial crisis that requires more funding to meet the debts it has acquired. the past. last year.
For famous lawyers, Bukele’s proposal means only one thing: the nationalization of pensions.
“There was a disturbing announcement, the financial situation of the country is in trouble, it cannot be said that before that it was fine, and what can come is the nationalization of the state. annuitiesSaid Eduardo Escobar, of Citizen Action, during a Channel 21 interview.
“The big fear of the proposal is that they want to confiscate Salvadorans’ money,” said Arnao Paulinas, a lawyer and political analyst at the Central Asian Federation’s Human Rights Institute, in a radio interview.
The constitutional lawyer, Enrique Anaya, had already warned that the nationalization was part of the drafting of the new constitution that the government, through Felix Ulloa, put in place several months ago.
According to the new wording of Article 50 of the Constitution, “Social security is a public service… and this service is provided by one or more state institutions…”.
In the current Magna Carta wording, the word “State” does not appear in the articles, which today allows for the existence of private companies that provide the service of fund managers.
Changes to the constitution include the nationalization of pension savings
“With this reform, the confiscation of Salvadorans’ pension savings was announced,” the lawyer said at the time. Last night, Ulloa submitted to President Bukele the official document on these reforms for analysis and approval in the Legislative Assembly.
The nationalization of pensions was also warned at the time by international financial firms such as Amherst Pierpont Securities in the US and Barclays in the UK. Both institutions point out that the small financial margin that the state has to meet its financial obligations will lead to the nationalization of pensions.
Pension fund
Since 1998, El Salvador has an individually funded retirement system operated by private companies. According to this scheme, contributions are recorded in the personal accounts of workers. Since that date, the fund has raised $12 billion.
Before the transition to a private system, pensions were administered by the government, but due to the fact that funds had become insufficient and unsustainable, the current government decided to modify it.
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