Panama Police Officers will Cost Taxpayers $109.2 Million in 2027 for Special Retirement Benefits.
The State will allocate $109.2 million in 2027 for special retirements for police officers, Senafront and Senan, which allow them to retire with their full salary.
The special pensions of the public force do not come from the Social Security Fund, the fund to which the rest of the country contributes, but directly from the General State Budget, that is, from the taxes paid by every taxpayer. Carlos González, former Director of the National Budget, admitted before leaving office in June 2024 that the system “was born with an actuarial flaw,” based on a pension scheme that was never designed with the necessary financing to sustain itself, and instead depends, year after year, on the Treasury covering the difference.
Who Pays and With What Money.
The Minister of Economy and Finance himself, Felipe Chapman, described the special pensions as “unsustainable and unacceptable” and warned that, if not corrected, there will come a point when more than half of the payroll of the Ministry of Public Security will be used to pay pensions for retirees instead of salaries for active personnel. In the Assembly, this formula is the subject of constant criticism. Several deputies have even spoken of making changes to the law, but so far nothing has materialized.
Millions Year After Year.
The $109,220,456 for pensions and retirement benefits that the Ministry of Security budgeted for 2027 implies an increase of only 4.8% compared to the $104.2 million of 2026. That figure, however, is half of what the ministry itself requested from the MEF: $214,923,751. The MEF cut $105.7 million, 49.2% of the request. This pattern of asking for much more and receiving minimal adjustments, is not new. It is the most recent snapshot of a trend that the Ministry of Economy and Finance’s own Budget Directorate has publicly acknowledged as unsustainable.
That August 18th.
The issue is on the table just days after Panamanians were forced to choose, before August 18, between staying in their current pension system or moving to the new model created by Law 462 of 2025. The reform divided the system into three subsystems: the Defined Benefit, the Mixed, and the new Single Capitalization with Solidarity Guarantee. That left thousands of contributors facing a technical and, for many, a confusing decision: those in the Mixed subsystem with less than six years to retire could choose between staying or migrating before the deadline, while those in the Mixed subsystem with more time ahead were automatically transferred. Those who contributed under the Defined Benefit scheme, on the other hand, remained there unless they decided otherwise, even though that system limits the maximum pension to $2,500 per month.
