Retirement Changes: What You Need To Know Based On Your Age Group

(MENAFN- Newsroom Panama) The reforms to the public pension system have more implications than just raising the retirement age by three years for those under 50 and increasing the contribution paid by employers. Here you will find important details of how the retirement plans proposed by the State work.
The National Assembly has submitted a bill to modify the retirement rules in the Social Security Fund (CSS). These changes would divide people into four groups based on their age and type of affiliation, as well as including two types of special benefits. Below, we explain which group you might be in and what these changes would entail.

Group A: retirement unchanged

• For women over 50 years old and men over 55 years old.
• They would retire under current rules, with a maximum pension of $2,500 per month.

Group B: retirement with partial cap

• For men under 55 and women under 50 who are in the old system (defined benefit) and did not change to the mixed system in 2005.
• The pension would be calculated at 15% of the monthly salary. In no case may the recorded salary used for the calculation exceed $2,500 per month.
• Contributions would be held in an account with an annual yield of 4%. For contributions made after the reform, 15% of the total salary would be taken, without the limit of $2,500, and the interest would be calculated according to the effective annual yield of the Single Solidarity Fund.

• For workers who switched to the mixed system in the 2005 reforms and all new contributors since that date.
• These workers would be eligible for a pension of 15% of their total salary, instead of the current 10%. Contributions made before the reform would be kept in an account with an annual yield of 4%.
• If they decide to retire before the age of 60 (women) or 65 (men), they would have a discount on their pension. The longer they work, the smaller the discount would be.

• For all new contributors entering the system after the reform.
• These workers would be eligible for 15% of their total salary to calculate their pension, with no deductions if they decide to retire early.

• Basic assistance:
  $144 per month would be granted to those over 65 who did not contribute to the CSS. This would replace the $120 program for those over 65.
• Solidarity pension:
  $265 per month would be granted to those who, although they contributed to the CSS, their contributions would not be sufficient for a minimum pension of $265.

In his appearance yesterday, Thursday, November 7, before the deputies of the National Assembly, Dino Mon, director of the Social Security Fund (CSS), detailed the proposed changes to the pension system that include a three-year increase in the retirement age for men under 55 years of age and women under 50, an increase in employer contributions, and the unification of two pension programs. Mon explained that the proposed system establishes four types of pensions under the contributory component of solidarity capitalization.

The proposed law to reform the Social Security Fund (CSS) includes changes focused on the unification, coordination and integration of public health services.
“The goal is to reduce the cost of medicines through joint purchases and, in addition, to ensure that the entire pharmacy network has access to better prices,” said the Minister of Health. The end result would be that the health services of CSS and Minsa would be unified.

MENAFN08112024000218011062ID1108866505