A group of Chilean pensioners demanding respect for their rights during an activity in Santiago this month, organised to promote the rights of women in this country. Credit: Claudio Riquelme/IPS

By Marianela Jarroud
SANTIAGO, Jul 24 2015 (IPS)

The already precarious situation of pensioners in Chile will get even worse if a controversial initiative is approved. Under the new plan, the elderly would mortgage their homes to increase their meagre pensions, most of which come from prívate pension funds, and which average 230 dollars a month.

“This plan is a ruse, a dirty trick,” Nuvia Zambrano, a pensioner, told IPS. “If we can hardly survive on our pensions, how could we afford the mortgage payments? Our homes would be left to the banks,” said the former high school biology teacher who retired 10 years ago.

The reverse mortgage plan, presented by opposition legislators and backed by governing coalition lawmakers, would create a contract between the homeowner and a government institution. Based on the value of the property, and the calculation of the owner’s life expectancy, the period for payment and monthly payments until the end of their life would be set.

The pensioners would continue to live in their homes until they died. After that, their heirs could buy back the property for the amount already paid or hand it over to finish paying off the mortgage.

But experts say the new plan would create “a new psychological burden for older adults,” who already live their last years in debt and with pensions that in many cases do not cover the cost of living.

Chile’s pension system, based on mandatory individual retirement accounts, was introduced in 1981 by the military dictatorship of General Augusto Pinochet (1973-1990).

Under the system, workers deposit at least 10 percent of their wages into personal accounts managed by private pension funds (AFPs).

The capital is then invested in shares in large companies and banks in Chile or abroad, which generate returns.

According to the Fundación Sol, a labour think tank, the pension funds have earned more than 5.8 bilion dollars so far, from the lucrative business of mandatory individual accounts.“Our pensions don’t cover the cost of living; they might as well just give us poison instead, because you die of hunger anyway.” -- Nuvia Zambrano

Meanwhile, nine out of 10 pensioners in Chile receive less than 230 dollars a month, equivalent to 66 percent of the monthly mínimum wage of 373 dollars, according to the respected think tank.

Prior to the pension reform, Chile had a public pay-as-you-go system.

“Back then they said the new system was wonderful,” Marianela Zambrano, Nuvia’s sister, told IPS. “I was just coming back from exile in Denmark and didn’t have much idea of how it worked.

“Now I know it’s the theft of a century, a disgusting theft, an injustice,” she said angrily.

The 62-year-old English teacher who worked for over 30 years receives a pension today of just 334 dollars a month. Her rent payment alone eats up 186 dollars.

“Our pensions don’t cover the cost of living; they might as well just give us poison instead, because you die of hunger anyway,” she said, bitterly.

Today, only a handful of countries have pension systems similar to Chile’s: Dominican Republic, Israel, Nigeria, Maldives, Malawi, Kosovo and Australia – although Australia ensures a basic pension of 1,000 dollars a month for many of the country’s older adults.

Among Chile’s neighbours, Argentina switched back from a mixed system to a traditional pay-as-you-go scheme, in 2008.

Uruguay, meanwhile, has a mixed system consisting of a public pay-as-you-go regime combined with individual accounts. It was modified in 2005 though a labour reform, which increased wages and gave trade unions a stronger role.

In Chile, on the other hand, the system put in place by the dictatorship in 1981 has been operating for 35 years and the democratic governments that have ruled the country since 1990 have shown no intention of modifying it.

The centre-left governments, including the current administration headed by socialist President Michelle Bachelet, and the administration of her right-wing predecessor Sebastián Piñera (2010-2014), only introduced measures to ensure pensions for those excluded by the AFPs.

“This system has been tremendously successful with regard to one objective: financing the economy, injecting fresh capital to capitalise companies or economic groups,” Fundación Sol economist Gonzalo Durán told IPS.

In this South American country of 17.5 million people, women retire at the age of 60 and men at 65. But in practice, both men and women tend to work until at least the age of 70.

The prívate pension funds determine life expectancy, which varies depending on gender and other factors, using actuarial life tables.

Life expectancy in Chile stands at 83 years for women and 76 for men, according to the World Health Organisation (WHO).

But according to the AFPs, Chilean women have a life expectancy of 89 and men, 85.

Each pensioner’s projected lifespan, and the resulting number of monthly payments, are calculated according to the life table. Their heirs can later inherit a monthly pension, which the AFP determines based on what is left of the pensioner’s lifelong savings. That depends on factors such as the educational level of the sons and daughters.

According to the Superintendencia de Pensiones, the government agency that oversees the pension funds, in December 2014 nearly seven of every 10 Chileans between the ages of 55 and 60 had roughly 31,000 dollars in their individual accounts – an amount that does not ensure a pension of over 155 dollars a month.

“The pension system plays a major role in the concentration of income and the problem of inequality, which we have to hold a debate about,” said Durán.

He added that the system is a key component of Chile’s neoliberal model.

Durán said the private pension fund system is not meeting the goal of providing social security in Chile, where the estimated cost of a family’s basic needs is 264 dollars a month, and medications can cost three times what they cost in Argentina or Peru.

As a result, older adults are impoverished and have no choice but to continue working after retirement to compensate for their small pensions. They are also in debt.

The most important reform of Chile’s pension system was carried out in 2008, during President Bachelet’s first term (2006-2010). It benefited the poorest 60 percent of the elderly. Her administration introduced a 133-dollar a month public pension for people who never paid into a retirement scheme, such as street vendors, the self-employed, homemakers or small farmers. In addition, the lowest pensions were topped up.

This scenario “is suspicious,” said Durán, because while pensions are low, “the system brings big benefits to prívate companies” – unlike a pay-as-you-go scheme.

“There is a legitimate suspicion that they don’t want to change the system in order not to deprive the companies of the profits they are earning. If that turns out to be true, it’s very serious,” he said.

For now the government says it will not back the controversial bill. But the lawmakers who are behind it say they will continue to push for it to be passed. And it has support on both sides of the political spectrum.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

Manuel Campos, a 56-year-old taxi driver, is not covered by either the public or private pension system in El Salvador. His only hope is that his children will support him in his old age. Credit: Edgardo Ayala /IPS

By Edgardo Ayala
SAN SALVADOR, Aug 29 2014 (IPS)

Two of the promises made 16 years ago when El Salvador’s pension system was privatised have failed to materialise: There was no expansion of social security coverage and no improvement in pensions. Now pressure is growing for a reform of the system.

Although 20-year-old Kevin Alexis Cuéllar is one of the 2.7 million people enrolled in the private Pensions Savings System (SAP), he has no coverage.

Cuéllar, who is self-employed and does not have steady work, told IPS that he does not pay into the private account which will supposedly provide his pension when he retires. Men in El Salvador retire at the age of 60 and women at 55.

The system established in 1998 has run up against the reality of employment conditions in this Central American nation of 6.2 million people.

A 2013 report by the International Labour Organisation (ILO) and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) found that 65.7 percent of the economically active population works in the informal economy. Based on statistics from 2011, that is equivalent to 1,269,000 people.

Cuéllar operates a sound system at business events promoting brand awareness. Forced to drop out of school to work before finishing the eight years of basic education, it will not be easy for him to find formal employment in this country, which has no specific plans to reduce the size of the informal sector.

The situation worries him. “The time will come when I won’t be able to work, because of old age or sickness, and we’ll be left without a pension,” he told IPS.

That fear is shared by the tens of thousands of families who have no social security coverage.“It was clearly the business deal of the century, the right to a pension was commodified, to the benefit of financial groups.” -. Trade unionist Francisco García

Expanding coverage “is one of the pending challenges” of the private system, María Elena Rivera, a researcher at the Guillermo Manuel Ungo Foundation (FundaUngo), told IPS.

Although 2.7 million people are enrolled in the private pension scheme, only 653,257 are active contributors, according to figures from July. The rest are not formally employed.

That means only one out of four people of working age are active contributors to the private pension savings scheme, Rivera said.

The government of rightwing president Armando Calderón dismantled the public social security system in 1998 and created the private pensions scheme, in the midst of a wave of privatisations sweeping Latin America.

Under the new scheme, contributions from workers and employers generate a payment of 13 percent of the monthly salary that goes into the employees’ individual accounts.

These individual savings will produce, after 25 years of contributions, the money that will pay the pensions of workers once they reach retirement age.

Other Latin American countries like Chile, Colombia, Dominican Republic, Mexico and Peru also privatised their pension systems.

Participation in the SAP was mandatory for workers under the age of 36. Their individual accounts are run by pension fund administrators (AFP).

Men over 55 and women over 50 had to stay in the public system, which is to disappear as that generation gradually retires and passes away.

In the public pay-as-you-go system, all workers pay into the same fund, which is financed on the basis of solidarity between generations.

Those who were between the ages of 36 and 50 in 1998 could choose between the public or private systems.

“It was clearly the business deal of the century, the right to a pension was commodified, to the benefit of financial groups,” the secretary of the Workers’ Union of the National Institute for Public Employees’ Pensions (SITINPEP), Francisco García, told IPS.

The union wants to return to a mixed system, with the state controlling the pension system, and the AFPs as optional.

The government of leftwing President Salvador Sánchez Cerén, in office since June, said the private system has failed. But it has not given any indication of what reforms it will push through in the next few months – although it has ruled out a return to a public social security system.

In July, SAP had just under 7.5 billion dollars in accumulated contributions. Those funds were initially to be invested in El Salvador’s stock market, and the yield would go into the employee’s account.

Investing the funds in the stock market was also supposed to help drive the country’s productive development, by giving a boost to key sectors of the economy, generating more formal sector jobs and making it possible to expand coverage. In addition, the pensions would be improved.

The minimum retirement and disability pension is 207 dollars a month.

But the local stock market is too small to help productive enterprises get off the ground, analysts say, and formal employment did not receive the expected boost, nor did pensions grow.

Manuel Campos, a 56-year-old taxi driver, who is not enrolled in either the public or private pension systems, only hopes that once he is too old to work, or if he falls ill, his three children will help support him.
“If I didn’t have that hope, maybe I would have to do what so many people are doing today: beg on the streets,” Campos told IPS while waiting for customers on a street in San Salvador.

In another part of the capital, 40-year-old Sandra Escobar is preparing lunch that she will sell at noon in the business where she works as a cook: a small tin shack on the side of the road.

“My idea is to save up, little by little, to have something for my old age. But it’s hard,” said Escobar, while cooking beef in a frying pan.

When most of the younger workers opted for the private system in 1998, the government assumed the burden of the underfinanced public system, which according to the latest data, from 2012, was around 420 million dollars a year.

That is the amount needed to pay the pensions of the employees who stayed in the public system: 100,247 as of October 2012, according to a document from the Salvadoran Association of Pension Fund Administrators (ASAFONDOS), which represents the two AFPs.

In 2006, the legislature approved the Fideicomiso de Obligaciones Previsionales (pension trust fund), through which the AFPs are legally obligated to invest part of the funds in bonds issued by the state, and thus obtain the resources for paying pensions.

But these bonds have low returns, 1.4 percent a year, not enough to significantly increase the pensions of workers. Legally, El Salvador’s AFPs cannot invest in the international stock market, where they would obtain higher returns.

IPS was unable to obtain an interview with the president of ASAFONDOS, René Novellino. But a report he published in 2013 proposed approving a gradual opening up of the system, with clear limits and strong oversight, to investment in international stock markets, among other measures.

FundaUngo is calling for a national dialogue, so all of the sectors can set forth proposals for reforming the system.

In the meantime, soundman Kevin Cuéllar, cook Sandra Escobar and taxi driver Manuel Campos continue to face the reality of informal employment, with no prospects for receiving a pension when they reach retirement age.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

For many Japanese women, old age is becoming synonymous with poverty and loneliness. Credit: Isado/CC-BY-ND-2.0

By Suvendrini Kakuchi
TOKYO, Dec 10 2012 (IPS)

When Hiroko Taguchi retired this past April, at the age of 64, from her job as an insurance sales agent, she joined the rapidly growing ranks of Japan’s aging women who now outnumber their male counterparts.

Taguchi, a divorcee who lives alone, is heavily dependent on her pension to support what will likely be a lengthy retirement, given that women in Japan live, on average, about seven years longer than men. A survey conducted earlier this year by the Health and Welfare Ministry revealed that women account for 87.3 percent of Japan’s record number of 50,000 centenarians.

“I am lucky I did not quit my job when I married, as was the norm for women of my age,” Taguchi told IPS. Indeed, she is one of a very small number of women in Japan for whom old age is not synonymous with poverty and loneliness.

Most of her contemporaries who were part-time workers or full-time homemakers in their youth and middle age now draw monthly public pensions of just 500 dollars or less – barely enough to cover their living costs.

A patriarchal social structure that has boxed women into the role of caretaker and homemaker is largely responsible for the vulnerable situation many old Japanese women now find themselves in.

According to government data, 70 percent of women leave their jobs when they start a family, returning to the workplace – often as part-time workers – only when their children are older; this pattern significantly reduces their chances of drawing a decent pension after retirement.

Additionally, the fact that women are experiencing increasingly long life spans means that many outlive their husbands and become entirely reliant on the state welfare system.

Social experts here say Taguchi’s sunset years provide a spotlight into the diverse issues that women in Japan’s graying society face today.

“More women than men face poverty in their old age given their (life spans) and lower incomes,” pointed out Professor Keiko Higuchi, an expert on aging populations at Tokyo Kasei University, as well as an advisor to the government on gender and policies that affect the elderly.

Aging in a patriarchal society

Japan currently has the world’s fastest aging society. Experts estimate that by 2025 more than 27 percent of the population will be over 65 years old.

If the present trends continue, experts predict that 40 percent of the senior population will be female: women are clocking 86.5 years, compared to 79.6 years for men.

Higuchi, who is also a prominent women’s rights activist, has lobbied the government long and hard to develop policies that meet the needs of elderly women.

Among the many issues that aging women face are loneliness, higher prospects of disability and growing poverty in a nation that is grappling with a huge public debt and threatening further cuts in social services and state welfare.

Official statistics from the Health and Welfare Ministry confirm this grim picture – government data shows that 80 percent of those over 65 years and living alone are women, mostly divorcees and widows.

Women also comprise 70 percent of the population in nursing homes, with poverty affecting 25 percent of the female population over 75 years compared to 20 percent among males.

The Ministry also reported that in 2011 there were almost 420,000 women over the age of 65 who depended on welfare handouts, compared to 324,000 men.

According to the prominent Japanese feminist Junko Fukazawa, who counsels women facing domestic violence – a risk she says is increasingly common for older women living with their husbands or sons – deep-rooted gender discrimination makes women even more vulnerable to the troubles of the sunset years.

Social traditions that have forced women to take care of the family while men worked outside “is the prime reason why women give up their jobs when they have children, (and end up with) lower paying jobs and financial instability in their old age”, Fukazawa told IPS.

“The situation is ironic,” she added, pointing out that those who have traditionally been the primary caregivers for young and old alike are now becoming a population that needs the most support.

The critical need to focus national aging policies on women is gaining traction around the world. A new report, ‘Aging in the Twenty-First Century’, released in September by the United Nations Population Fund (UNFPA), calls on governments and other stakeholders to take heed of the mounting body of evidence that women are living longer than men, and adjust their national plans accordingly.

The report documented figures around the world that showed that for every 100 women aged 80 years and over, there are only 61 men.

Aging in Japan, the world’s third largest economy, illustrates some of these pressing issues against the backdrop of a shrinking working population, which is expected to plummet from 80 to 52 million by 2050.

For the younger generation of Japanese women, who are coming of age during a time of government austerity and desperate attempts to reduce public spending, the forecast is alarming.

Already this generation of women is beginning to feel the crunch of poverty, with Labour Department statistics pointing to a rise in lower-paid part-time female employment, a trend that indicates an erosion of retirement stability for a large portion of the labour force.

For Higuchi, “The current aging picture clearly shows that Japan’s economic growth policies have eroded traditional family values that protected old people and have been particularly unfair to women.”

Meanwhile, women like Taguchi are moving cautiously down the road. “Acutely aware that I would face a lonely future, I have saved for decades and will continue to do so. At least I can avoid poverty – I hope so, anyway.”

(END)

By Jinty Jackson
Sep 20 2012 (IPS)

Carolina Poalo strikes the dry earth over and over with her hoe, her frail body bent almost double. She is determined to begin planting. During the long, dry season in Mozambique, she and her two young grandchildren have eaten little but cassava leaves.

In a country where the average life expectancy is 50, the 65-year-old is considered very old, but her golden years are far from restful.

Instead, life is a constant battle for the many elderly living in the semi-rural outskirts of the capital, Maputo.

Violence and abuse against the elderly – ranging from rape to psychological abuse and neglect – are on the rise, say authorities. Often this is linked to witchcraft accusations, although no official statistics exist about the phenomenon. Perpetrators are often family members.

Carolina Paolo’s sister, Amelia Paolo, fled her home when her sons accused her of witchcraft. “They threw me out, calling me a witch,” she tells IPS. “I only survived thanks to my plot of land.”

It was a bit unclear how she got access to land where she lives now, but she has a plot of land next door to her sister’s in Bilalwane, on the outskirts of Maputo.

“I don’t get any help from my children. Sometimes they dump their kids here when they get pregnant,” Carolina Paolo tells IPS of her two daughters.

The women survive by earning extra cash when they can, working in nearby fields. The five dollars a month state elderly grant, the lowest in Southern Africa, is enough to buy them a one-kilogramme bag of salt. With no access to running water, the money also comes in handy when filling up at a nearby tap – one barrel of water costs them three cents.

Mozambique’s social welfare office is notoriously corrupt and inefficient. Only one in three people interviewed by IPS said they received the grant despite all three having applied for it.

Her body shrunken and her eyes grown over with cataracts, Maria Chambale (70) admits she is frightened of what might happen when she can no longer work, “I must go on fighting,” she says and shrugs. “What else can I do?”

She, like the other elderly in Mozambique, works on her own small plot of land to grow vegetables to feed herself. She also accepts “piece jobs” or day jobs in nearby fields owned by richer neighbours who have land but do not have the time to farm it.

Despite the heady pace of Mozambique’s economic growth – the World Bank expects the economy to expand by 7.5 percent in 2012 – little benefit is trickling down to the poor, many of whom are elderly people.

“Sixty-eight percent of the elderly live below the poverty line in Mozambique,” says Janet Duffield, the director of the aid agency HelpAge International in this country.

For the elderly in the city who cannot grow food to feed themselves, conditions are even worse.

Sixty-year-old Armando Mattheus is amongst the many elderly people who now find themselves begging on the streets of the capital, unable to cope with the high cost of living. “Before I could buy something with the little I have but today I can’t buy anything,” says Mattheus, who spends his days outside a popular Maputo restaurant, begging tourists for handouts.

It is a situation experts say Mozambique’s government needs to address urgently. Eighty percent of people work well into old age in Mozambique – one of the highest rates in the world.

“The population in Mozambique works until they die because there aren’t alternatives,” says the director of Mozambique’s Institute of Social and Economic Studies, António Francisco.

With half its population of 23 million under 18 years old, Mozambique is often referred to as a country of young people. Those who can remember the devastating civil war that ended two decades ago are now in the minority.

Newly discovered natural gas and coal deposits promise untold riches for a lucky few and will soon fuel what is already one of the world’s fastest growing economies.

The aged make up a tiny fraction of the population – just five percent.  However, by the time a child born today reaches 60, that number will be nearly three times as high, according to Francisco’s research. This represents, he says, “an unprecedented demographic transformation in the history of Mozambique.”

Nearby countries – South Africa, Swaziland, Botswana, Namibia and Lesotho – all spend between 0.3 and two percent of GDP on grants for the elderly. Like Mozambique, they have a young population structure but such an approach can pay dividends.

Japan, which in 2010 registered 38 percent of its population over the age of 65 – the world’s largest proportion – spends over 10 percent of GDP on pensions, according to the International Monetary Fund. And the United Kingdom spends five percent of GDP on pensions, according to the Organisation for Economic Cooperation and Development.

Studies show that providing state pensions can reduce hunger and poverty because elderly people share resources with the family.

A 2003 study by HelpAge International found that “social pensions increase the income of the poorest five percent of the population by 100 percent in Brazil and 50 percent in South Africa.” And a 2005 study by the University of Manchester in the U.K. found that people living in households receiving a pension were 18 percent less likely to be poor in Brazil and 12.5 percent less likely in South Africa.

One fifth of all families in Mozambique include an elderly person. This is one reason why aid agencies are pushing the government to fall into step with other countries in the region. Another is that 43 percent of orphans are cared for by grandparents in Mozambique. The country has an HIV prevalence rate of 16.2 percent, one of the highest rates in the world.

“Of the 10 African countries with the highest HIV prevalence, eight have introduced some form of social pension or cash transfer directed at older people,” says Duffield.

The government would need to provide citizens over 60 with a minimum of 26 dollars a month to have an impact, estimates Francisco. The figure represents three percent of the country’s 12.8-billion-dollar GDP.

But universal social pensions would be too costly, argues Felix Matusse, who heads the government’s Department for the Elderly. “We still depend on external aid,” he explains, pointing out that foreign donors contribute over 30 percent of the entire state budget.

But the government cannot go on pleading poverty for long. By some estimates, Mozambique stands to collect over five billion dollars a year in the long term from its natural gas alone.

Bolivia, South America’s poorest country, financed its universal pension scheme or “Dignity Pension” in 2007 through a direct hydrocarbon tax. Could Mozambique do the same?

“Improved revenue collection from new-found mineral resources could free up fiscal space more than adequate to provide a cash transfer for all older people,” suggests Duffield.

Others argue that caring for the elderly should not have to depend on hydrocarbon windfalls. “What kind of state do we have that cannot look after five percent of its population?” asks Francisco, adding that nearby Lesotho finances a pension scheme but has no natural resources to speak of.

Few expect a major shift in government policy on pensions before the next national elections in 2014. But in the run-up, the government is showing greater willingness to tackle its elderly problem.

A draft bill, due to go to parliament before the end of the year, aims to protect the aged from abuse, meting out specific tough penalties for violence related to witchcraft accusations. However, there is no mention of universal old age pensions.

Matusse points out that Mozambique will not begin to reap the benefits of hydrocarbons for at least another five years. “Then we will see what is going to happen in terms of social security,” he says.

Luisa Gutiérrez, 65, dances a frenzied mambo on an unusual dance floor: a street in the Nicaraguan capital. Dozens of cars line up behind her, honking their horns impatiently, while she, surrounded by elderly people with canes, walkers and protest signs, dances to demand a government pension.

The street dance performed by Gutiérrez, a former employee of a privately-owned footwear company that has since closed, is one of the diverse forms of protest staged by 20,000 retired workers who have come together in the non-governmental Older Adult Unit (UNAM).

The demonstrations will be stepped up in September, on the fifth anniversary of the start of the continuous protests.

UNAM is demanding the reinstatement of an old law requiring that the state pay the pensions of former workers who did not pay into the social security system long enough to qualify for a full pension.

Some 6,000 members of UNAM blocked the main streets of Managua last week and plan to continue demonstrating until their demands are met.

The president of UNAM, Porfirio García, told IPS that within the next few weeks, they will go on hunger strike in a public square outside the government building, to force the left-wing government of Daniel Ortega to support a bill that is stuck in parliament.

“We gave the best years of our youth to our country, and they took away our right to a reduced pension,” García said. “We don’t want to die without using our last strength to get that right reinstated and at least leave it as a legacy for our grandchildren.”

UNAM, which turns five years old on Sept. 23, was created by a group of around 100 retirees who assiduously visited the offices of the Nicaraguan Social Security Institute (INSS) in Managua, to apply for a partial pension based on the number of years they paid into the system while working.

Under Nicaragua’s social security law, to be eligible for a pension and specialised healthcare at INSS clinics after the age of 60, workers must have paid into the system for at least 750 weeks (14.4 years).

But García explained that most retired workers in the country have not paid into the social security system for 14.4 years, largely because of the instability in this Central American country, caused by war, natural disasters and constant economic and political crises, which affected the private companies and public offices where today’s elderly protesters once worked.

A law that was repealed in early 1990 during the government of Violeta Barrios de Chamorro (1990-1996), as a result of pressure from multilateral lending institutions, established a minimum reduced pension of approximately 50 dollars a month for those who did not qualify for a full pension.

Nicaragua, population 5.8 million, is the second poorest country in the Americas after Haiti.

In response to UNAM’s years of protests and demands, lawmaker Adolfo Martínez Cole of the Bancada Democrática Nicaragüense, a small opposition party, introduced a bill, called the “special law to grant reduced pensions to the elderly”, to cover workers who did not complete their payments.

Martínez Cole explained to IPS that the bill was aimed at making a fixed monthly stipend available to former workers of retirement age who made at least 250 weeks worth of payments, according to INSS records.

As of 2007, there were 65,000 people registered with the INSS, who had made payments for between 250 and 750 weeks. But a study is needed to determine who has died since then, who is living outside the country, and who is in need of a pension.

“We are not asking for anything extraordinary, only the humanitarian enforcement of a right established by the constitution, which stipulates that retired workers have the right to protection by the family, society and the state,” he said.

But the bill was immediately criticised by legislators of the governing Sandinista National Liberation Front (FSLN), who hold a majority – 63 of 91 seats – in the single-chamber parliament.

However, Sandinista lawmaker Gustavo Porras, a trade unionist in the public health sector, clarified to IPS that the bill had not been rejected and was under study.

“They (the authors of the bill) do not say where the funds would come from; they just say the former workers must be given money,” said Porras, chairman of the parliamentary health commission. “It cannot be done without a technical study about the population in retirement, the amount of their pensions, where they used to work, and their job history.”

Porras said the Ortega administration has created a special commission to study the demands of the group of elderly protesters, and that an INSS technical report is being drawn up to assess the number of people affected by the problem and the payments they have made to the system, and based on that information, to seek sources of financing.

After the last protest, as a result of which 20 of the demonstrators ended up in the hospital due to fatigue and symptoms associated with age-related ailments, the government, through Rosario Murillo, the president’s spokeswoman and wife, announced that a meeting would be held in the near future to inform the protesters about the study that is being carried out.

According to INSS figures, the government has paid 5,700 people monthly 45-dollar stipends since 2010, as well as providing them with food aid and medical care, and free eye glasses, prosthetic limbs and wheelchairs, and support to their families in case the retired worker dies.

Nevertheless, the government has admitted that it does not have a sustainable source of funds to cover the reduced pension payments, but says it is working on finding a permanent alternative.

Economist and social researcher Adolfo Acevedo Vogl, however, argues that the country does have the funds and economic structure for guaranteeing the elderly a partial pension.

“All that would have to be done is dedicate a portion of the taxes collected above the budgeted estimate to cover their demand,” he said.

According to an official household survey, there were 363,400 people over 60 in Nicaragua in 2010. Of that total, only 55,000 were drawing a retirement pension from the INSS. The remaining 85 percent received no social security benefits.

“In the rest of Central America, non-contributory pensions have been established for elderly persons living in extreme poverty, whether or not they had made social security payments. Nicaragua has the capacity and the humanitarian duty to do that,” Acevedo Vogl said.

According to his statistics, a minimum monthly pension for people over 70 would cost the state 52 million dollars a year. “In 2011, the taxes collected above budgeted expectations amounted to more than 147 million dollars, which means that establishing a scheme of this nature would cost the country just 35 percent of the extra taxes collected,” he said.

And while the debate continues, the retired workers, like Luisa Gutiérrez, threaten to move on from street dances and roadblocks to occupations of hospitals and hunger strikes, even if it means they will be putting their lives at risk.

The Argentine pension system, renationalised in 2008, now covers more than 90 percent of people of retirement age, the highest coverage in Latin America. But analysts are concerned about its sustainability.

“In social terms, I think the impact of the high coverage rate is excellent, but the challenge is to sustain the system over the medium term, when 35 percent of workers are in the informal sector,” social policy expert Fabián Repetto told IPS.

Repetto directs the social protection programme of the Centre for the Implementation of Public Policies Promoting Equity and Growth (CIPPEC), a think tank that emphasises the need to preserve the continuity of the pension scheme.

Experts in different fields concur that the expansion of coverage was not directly the result of the decision to renew state control of the pension system, which was partly privatised in 1994, but of a separate government measure enabling people who had never contributed to the system to draw retirement pensions.

Under the plan, originally designed to apply to domestic and informal sector workers with incomplete or no contribution records, they could claim a pension at retirement age and pay off the missing contributions in monthly instalments discounted from the pension over five years.

The programme got off to a timid start in 2005, during the centre-left government of the late Néstor Kirchner (2003-2007), and accelerated in 2007 after his wife and successor, President Cristina Fernández, took office. It enabled 2.4 million people aged over 60 who had never contributed to the system to receive a monthly pension.

The Economic Commission for Latin America and the Caribbean (ECLAC) reported late last year that Argentina had reached the highest coverage rate for pensions in the region, with nine out of 10 of its citizens of retirement age receiving a monthly income. Coverage has risen from 69 percent in 1996 to 90 percent today, the report says.

Although the extensive coverage is praised by experts, they express doubts about how the system will cope in the future, when the number of beneficiaries increases and contributions remain constant or start to decline.

Economist Luciana Díaz, director of CIPPEC’s fiscal policy programme, recognises the “valuable achievements” of the renationalised pension regime, but says any surplus it has is due not to working people’s contributions, but to the substantial proportion of tax revenue the state devotes to supporting it.

The system is no longer self-financed out of workers’ and employers’ contributions, as it was when it was created. According to Díaz, at present 42 percent of the funds paid out as pensions comes from general taxation.

Other challenges also jeopardise the continuity of the system, such as informal work, the ageing of the population and contingent liabilities arising from pensioners’ lawsuits against the system, Díaz told IPS.

Every month more than 1,500 court rulings are handed down against the state and in favour of pensioners for mistakes in payments and the need to upgrade monthly incomes, a problem that may be obviated now that a law has been enacted stipulating that the buying power of pensions must remain steady.

A study by Díaz emphasises that in 1950, when the solidarity-based state system was created, the ratio of contributing workers to pensioners was 10 to one, whereas now it is only 4.3 to one. The system has been “significantly improved” in comparison with the period when it was administered by the private sector, said economist Mariana González of the Centre for Research and Training of the Argentine Republic (CIFRA), associated with the centre-left Argentina Confederation of Workers (CTA), one of the country’s two main union confederations.

González told IPS that she approves of the decision to return pensions to state control because it allows the government “to have control of the resources, guarantee the stability of pension payments and invest in productive sectors, not just financial areas.”

However, she said that in order to maintain and increase pensions, it will be necessary to augment the fund, either by increasing government payments or by increasing the contributions of companies for their employees.

The Argentine social security system, based on intergenerational solidarity, was created in the mid-20th century as a regime under which workers and businesses made compulsory payments to a fund out of which pensions were paid.

In the late 1980s, the rise of unemployment and informal work – which does not contribute to the social security system – meant that the worker- and employer-generated resources no longer sufficed, and made it necessary to draw on general tax revenues to help finance the system.

In the midst of the feverish privatisation policy of the neoliberal government of former president Carlos Menem (1989-1999), a mixed system was created in 1994 under which workers could choose either to continue contributing to the state system, or to join a private retirement and pension fund administrator (AFJP).

The AFJPs, run by banks or other financial institutions, charged workers commissions of more than 30 percent of their total monthly contributions to create individual capitalisation accounts and manage the funds to yield profits for the future. But in 2008 the international financial crisis threatened to put these savings at risk, and the state was forced to guarantee members of the private plans at least a minimum income for life. At this point, the Fernández administration passed a law eliminating the private schemes.

Since then the state National Social Security Administration (ANSES) collects contributions, adds in taxes, and invests the resulting Sustainability Guarantee Fund (FGS) in bonds, shares, fixed-term deposits, negotiable obligations, trust funds and infrastructure financing.

In 2011, the annual average yield on FGS investments was 21.6 percent, ANSES reported – a “moderately successful” result according to Díaz, especially in the light of private estimates of the annual inflation rate that are higher than this figure, she said.

ANSES reported that since the renationalisation, the FGS has grown from 22.3 billion dollars to 47.5 billion dollars. In contrast to the AFJPs, the state-administered FGS invests more heavily in productive sectors and private company shares. The FGS also helps the state finance long-term projects, like building energy plants, or providing laptop computers for public school students.

The strategy is to inject funds into economic expansion, not just to make a profit but also to contribute to formal job creation, which will in turn boost social security contributions, ANSES argues.

At present the fund owns shares in 41 companies, and has 50 representatives on the boards of firms like Telecom Argentina, in which the state holds a 27 percent stake, or steel manufacturer Siderar, where it owns nearly 26 percent of the shares.

With its significant share in these companies, state directors on company boards have considerable influence on business decisions. For instance, in the past year they have managed to get a higher proportion of profits reinvested to increase productive capacity.