Academic journal article Social Security Bulletin

Venezuela Proposes Social Security Reform

Academic journal article Social Security Bulletin

Venezuela Proposes Social Security Reform

Article excerpt

Venezuela Proposes Social Security Reform

The Venezuelan Social Security Institute (IVSS) has severe economic problems. In 1993, it reported a 57 billion bolivars (Bs) deficit (approximately US$507.3 million). The Government approved a bond issue to help finance at least a portion of the debt, but only about 25 percent of the bonds were sold. In the meantime, the IVSS has been unable to pay its debts. In March 1993, retirees were owed 2.4 billion Bs (approximately US$21.4 million) in retroactive benefits dating back as far as 1990. The IVSS needs an estimated 109,344 million Bs (approximately US$9.7 million) to meet 1994 payments.

For years, the contribution rates to the IVSS were among the lowest in South America. Employees paid about 4.5 percent of earnings for social security coverage (old-age, survivors, and disability, sickness and maternity, and work-injury programs); employers paid 9.85 percent; and the government share was about 1.5 percent. Until 1991, contributions were payable on earnings only up to 3,000 Bs (approximately US$27) per month (the 1991 minimum wage was 9,000 Bs (approximately US$80) per month). …

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