The plebiscite that promotes the PIT-CNT against social security reform in Uruguay continues to generate repercussions and negative responses, not only at the government level – for going against one of the pillars of the reformist agenda of the administration of Luis Lacalle Pou— or of the Pension Savings Fund Administrators (AFAP) —because their very existence is at stake—; but also in specialists, unions and workers who warn about the impact that a constitutional reform such as the one proposed by the union center can have on the pension system.
One of the cases is that of the constitutional lawyer Martin Risso, who emphasized the elimination of the AFAP that the PIT-CNT and pointed out that it is something “very, very complicated that has not yet been visualized.”
In dialogue with radio El Espectador, the lawyer pointed out that “each of the people who have an account in an AFAP are going to lose those resources“, therefore, if the initiative of the union confederation is carried out, “the State is going to expose itself to workers sue the state asking for that money to be returned” which, in the end, does not belong to savings entities, but to individuals. According to Risso, these lawsuits could involve up to 22 billion dollars.
“Let’s imagine that half of the workers start a lawsuit. We are talking about 11 billion dollars, and the Uruguayan stateif you lose a trial of these characteristics, is going to go bankrupt“, insisted the lawyer, who announced that he has “no doubt” that the plaintiffs would win.
“I think the serious thing about this is that the risk is not realized. Make a decision that may expose Uruguay to lawsuits for up to 22,000 million dollars, it is too serious,” Risso insisted, and considered that “sufficient reflection has not been made” on the matter.
Finally, the constitutional lawyer added that if “politically or ideologically” you want to end the Pension Savings Fund Administrators, it can be done through a law that allows a gradual process. “This that extinguishes the AFAP with a retroactive process seems to me to be such a big risk that neither the State, nor any State, can assume,” he concluded on the subject.
Regarding the retirement age and the proposal of the PIT-CNT to put a limit at 60 years, Risso considered that it is not an initiative “as serious” as the one involving the AFAP, although he announced that it would be condemning the country “to a deficit” in most of the retirement funds.
The alert from union advisors
The cooperative of economists “Comuna”which advises different unions”, was also against the plebiscite promoted by the PIT-CNT and issued a report in which it points out that the constitutional reform proposed by the union center “has regressive effects” because it “benefits the most to those who least need to be benefited” and its “costs will be concentrated above all on the most vulnerable sectors”.
The group insists that the objective is to “alert of what they humbly consider as weaknesses” in the proposal of the PIT-CNT, and points out that the measure of establishing in the Constitution “60 years of age and 30 years of service” to access retirement is “controversial”: it is “so bad” to increase “for all people the minimum retirement age without considering characteristics individuals or professionals” as “it is to set it at 60”.
Likewise, the report warns that tying retirements to National Minimum Wage “creates incentives for subdeclaration and the informality in many sectors of workers”, among other negative factors; and that the proposal to eliminate AFAP and prohibit individual savings for retirement purposes can lead to “a scenario of considerable increase in endogenous public spending (that is, its growth cannot be controlled) of retirements and pensions”, which, in turn, will harm the payment conditions of the Uruguayan debt by the State.
Source: Ambito
