Retirement age to be raised by 3 years in Panama

Retirement age to be raised by 3 years in Panama

Panamanian President José Raúl Mulino during his message. Still taken from the video posted on X @JoseRaulMulino account

The Panamanian government presented a bill Wednesday in the National Assembly to raise the retirement age by three years in an attempt to clean up the public pension system, which is in danger of bankruptcy.

"The retirement age will be increased by three years, establishing it at 60 for women and 65 for men," Panamanian President José Raúl Mulino announced on national radio and television.

The bill also establishes a 3 percent increase in the monthly contribution that employers contribute to the Social Security Fund (CSS), the public entity in charge of pensions.

In addition, the Panamanian State will make an annual contribution of almost 1.2 billion additional dollars to ensure the viability of the system.

The Panamanian government presented this project after two months of talks with business associations, unions and other organizations.

Mulino intends that before the end of the year this initiative will be approved in the National Assembly, convened for extraordinary sessions.

Experts have warned that by 2025 the SSC will accumulate a deficit of more than one billion dollars, which could double by 2030.

"If this continues, next year only 87 percent of pensions will be able to be paid, and in 2029 half of the pensions paid today would not be paid. The situation is very serious," Mulino said.

The reform also establishes that workers who wish to do so may make voluntary contributions to advance their retirement age or retire with higher incomes.

However, the unions, which demonstrated this Wednesday in front of the National Assembly in Panama City, reject any increase in the retirement age.

These unions accuse the government of wanting to privatize pensions, which has been ruled out by the president.

"The Social Security Fund will not be privatized. We will have a unique and supportive system," Mulino said.

The Panamanian pension system went from being solidary to one of individual accounts in 2005, but it remains in the hands of the CSS, which also manages public hospitals.