Social Security programs at risk

TWO OF PANAMA’S  Social Security programs, Sickness and Maternity (PEM) and Invalidity, Old Age and Death (IVM), are at risk.

Social Security Director Estivenson Giron said that funds from the PEM are needed to repay loans for projects ordered by the last administration and to cover future projects.

The IVM will begin encountering financial difficulties in 2018 and its reserved will be exhausted by 2025 if changes are not made reports La Prensa.

The programs are the most significant operated by the agency.

The agency’s finances were discussed in a recent forum organized by the Chamber of Commerce. Giron told participants that the agency has 90 outstanding projects that will cost $800 million, plus the cost of equipping those facilities.

These include the construction of six polyclinics and the City Hospital project which has massively overrun it’s original budget and has suffered major construction problems and  delays.

The current administration has planned 16 projects, including the renovation of the Arnulfo Arias Madrid Hospital Complex.

The IVM pays pensions to about 240,000 people, and is expected to begin operating a deficit in 2018.

Officials said that options that need to be considered are raising the retirement age, increasing contribution rates or adjusting the investment policies of the reserves.

Current reserves are $5 billion.