Costa Rican Department Of Social Security Announces Changes In Pension And Retirement

Author:Ms Linda Negron
Profession:TMF Group
 
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The Costa Rican Department of Social Security (CCSS) has proposed an increase in total contribution to the Disability, Old Age and Death Fund (IVM) from 8.5% to 14%. They have also announced that early retirement will be phased out, while some changes are already in effect beginning this month.

Many have cautioned that the Costa Rican pension system funds may become insufficient in paying retires from 2027 forward. Some have even anticipated that the crisis could begin as early as 2023. As a precaution against these possibilities, the CCSS has proposed changes to the contributions employees and employers make to the system.

If these changes to the contribution of IVM were to be accepted, workers would have to contribute 5.5%, employers 6.5%, and the State 2.0%. Before making the final decision, CCSS will evaluate an upcoming independent study on the finances of the pension system.

Furthermore, the CCSS reported that the 'Early Penalized Retirement' benefit that was created in 2005 and allows the retirement of women and men aged 60 to 62...

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