According to the report from the University of Costa Rica (UCR) on the actuarial valuation of the Disability, Old Age and Death (IVM) regime, ff urgent actions are not taken, it is estimated that the inflow of contributions and investments will no longer be enough to honor the expenses in 2022-2028. As consequence, the reserve would have to be used and it would be exhausted in 2027-2034.
That means that within five or 10 years, funds in revenue will not be enough to pay pensions. By not reaching that money, the CCSS would have to use the reserve and the situation is more than complicated.
The same scenario had already been described in the study by consultant Eduardo Melinsky. However, it was totally rejected by the authorities of the Fund.
By 2014, the Superintendence of Pensions (SUPEN) had reported that, according to the latest study in 2008, by 2023 the regime would collapse and the CCSS had pointed out that this could happen in 2037.
The UCR report indicates that the current pension system has an average support radius of 1.3 active workers per pensioner and an average pension is equal to 38% out of the average salary of the contributors.
The institution proposes four reform options to the IVM beneficiaries profile requirements that apply to members who were under 51 years old until December 31st 2015.
-To reduce costs on wages (23.3%). It requires a 23% bonus plan on wages.
-To reduce cost on wages (29%). It requires a 23% bonus plan on wages.
– To reduce cost on wages (33.8%). It requires a 21.8% bonus plan on wages.
– To reduce cost on wages (36.5%). It requires a 20.6% bonus plan on wages.