He Executive power will seek to implement an increase in the contribution rate to the Retirement and Pension Fund for University Professionals (Cjppu) of Uruguay after the reform project of the social security institute foundered in the Parliament, and at the request of the board of directors of the Fund to be able to sustain the payment of liabilities beyond 2025.
The board of directors of the Professionals Fund had asked the government yesterday for a “last effort” that would allow for a solution to be agreed upon. financial crisis that runs through the institution. Now, against the clock—while the admitted constitutional deadline expires this Friday—the Executive is working on an alternative proposal that seeks give more resources to the organization, “give it a break,” according to Telemundo.
Although it is not a new project —as requested by the Cjppu—, the idea would be generate more income through an increase in the contribution rate that allows it to be “a palliative so that it does not fall” the pension institute that, currently, pays monthly liabilities for a total of 42 million dollars while the income is 39 million dollars. This deficit situation would cause its reserves to be depleted in 2025—if not before—which puts pension payments in jeopardy.
What does the Executive propose?
The initiative on which the Executive Branch is working and that would be sent in the next few hours to the Senate is a replacement for the article 58 of Law 17,738 of January 7, 2004, on the structure of the Professionals Fund.
This article is about the contribution rate, the key point that the government sees to try to buy time for the Cjppu and where the modification is proposed. Currently, the rate among active members is 16.5% of the fictitious salary of the corresponding category in each case, plus the percentage taxes that, by legal provision, the Fund receives.
What the Executive proposes is to raise this contribution rate to the 18% starting January 1, 2024; and to 19% from January 1, 2025. In this way, the amount of income would increase, which would balance the situation of deficit that crosses the Professionals Fund. Although this would be nothing more than a temporary solution.
The request from the directory of the Professionals Fund
Yesterday, the board of directors of the Professionals Fund maintained that the “political system” turned its “back” on them since they were “the only group that has not managed to have a solution,” according to the president of the institution, Virginia Romero
At a press conference, the leader warned again of the critical and unsustainable situation that the Cjppu is going through, and announced that “there will surely be changes” because the “situation is going to be complicated.” Likewise, he pointed out that, if the necessary measures were not taken, “surely the forecast for the first quarter of 25Unfortunately, it will not be fulfilled.”
Likewise, Romero indicated that when modifications were proposed in aspects on which they did not agree, it was not to delay the treatment of the project, but to improve it. “We never thought that we would not have a law, worse is not having any law”, he remarked. Along these lines, he questioned the lack of consensus and asked for an agreement: “That they come to an agreement and give us something, a law,” he said, warning that there are still two days left “for the Executive Branch to carry out one last effort”. “It is not possible for them to disagree on all points,” she added.