Leis, Social Security proposals from below

For the past two years, a proposal has been circulating down below, in the world of labor and social justice organizations, for alternatives to the facionalism that interferes with solidarity and the denigration of social values in the retirement program.

We have previously shared some of the proposals for dealing with the the Social Security fund crisis, and in this column we will add others.

We should note that there exist proposals from on high, without benefit of public comment, which are vertically launched and which may be influenced by external and internal interests that do not necessarily repersent the hopes and interests of the majority. At this moment, when we still have not seen the government's proposals on the Social Security Fund (CSS), we wonder publicly if these proposals from below have been considered:

Have the government compensate the fund annually for medical attention given to the beneficiaries. This compensation would be equivalent to 50 percent of the estimated portion of the previous year's Illness and Maternity Program budget that was actually spent on health care delivery. This estimate will distinguish between those who actually receive care and the total number of insured.

Make the notification of the CSS by employers whose enterprises are halting operations mandatory. Once they have been registered with the system, employers will be informed that they have a duty to notify the CSS that when they are shutting down operations within three working days after they cease operating, so that it can be determined that their payments to the fund are current. A fine of $200 has been proposed.

Reduce the surcharge for employers who make late payments of the employer and employee shares of social security deductions by two percentage points. Those who fail to pay the amounts billed within the last eight days of the month will have to pay a penalty of 8 percent of the overdue amount. [Translator's note --- In any given month, employers report the curent salaries paid to employees and pay the taxes on the amounts reported the previous month, which have been calculated and billed by the CSS.]

Create a special investment management unit. Create an administrative unit that will carry out the specialized functions involved in investment management. This unit, which will support senior management, will, first, periodically estimate the market value of the fund by using specialized computer systems; and, second, will have the capacity to monitor, analyze and evaluate the performance of foreign and domestic financial markets. For the purpose of optimizing the diversification of the investment portfolio, the financial benefit of including new financial assets in the portfolio, as long as long as these fall within the framework established by law.

Increase by one percentage point the monthly interest on late payments that applies to both the government and private empoyers. Delay in payment of assessments will incur a charge of two percent per month or fraction of a month on the overdue amount.

Increase the current combined 9.5-percent employer-employee payroll tax rate on basic salaries. Increase by at least 3 percentage points the employer share of payments to the Disability, Old Age, and Death Benefit (IVM, by its Spanish initials) program. Panama has the second lowest employer assessment rate in Latin America. The purpose of this measure is to increase the systemís operating revenues and to contribute to the financial stablity over the medium term of the CSS pension program.

Upgrade the procedure for obtaining a certificate of payment status from the CSS. In the competitive award of all public contracts conducted by the government, the district municipalities, the autonomous, semi-autonomous and decentralized public agencies, the bidders will be required to present a valid, unexpired certificate issued by the CSS, in which it confirms that the bidder and its principals are up to date on the payment of payroll deductions and employer taxes. Winning bidders will also be required to present a certificate when they present their final bill. Certificates will not be accepted from companies which have no workers or from firms whose principals are in arrears with the fund.

Equalize the requirements for years worked to acquire tenure among the employees of the CSS. All CSS officials who have two years continuous, uninterrupted service, who work full time for the institution, will enjoy the right of permanent employment and will not be subject to dismissal or suspension without cause.

Assign a proportion of the income from fines to the IVM Program: a third of the penalties and surcharges received by the Administrative program and two-thirds received from the Disability, Old Age, and Death benefit programs.

Transfer the surplus from the administrative program to the IVM. Develop and implement an automatic mechanism for the transfer of surpluses from the Administrative Program to the Disability, Old Age and Death Benefit program. To contribute toward reduction of the actuarial deficit, it it proposed that liquid reserves from that program be transferred, as it is not obliged to operate with reserves.

The author is a sociologist and writer. Translated for The Panama News by David M. Fishlow of Langhum Mitchell Communications, Washington DC and El Altozano, Volcan.

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More proposals from below