Edition date

February , 2001


Venezuela pushes back deadline again


VENEZUELANS will have to continue to wait for pension system reform. The National Assembly in December granted a three-month extension to the commission charged in August with coming up with a pension fund law by the end of 2000.
The commission is now slated to present a preliminary proposal in March in order to give the government-party dominated Assembly enough time to discuss it and take a final decision by July 2001. A likely date for implementation would then be January 2002.
"Time is passing as if this were not an urgent matter," fumed Juan Jose Caldera, an opposition legislator. This is the second time that pension reform has been delayed in two years.
The commission, which President Hugo Chavez had hoped would present a plan by December, is said to be divided over whether to let private pension funds operate in Venezuela, or whether to rely solely on a state-run system. Chavez has said he favours a mixed system, but some hardline leftists on the commission say pensions should be the sole responsibility of the state to prevent speculation with workers’ savings. Others have pointed out the costliness of a state scheme, noting that pensions awarded to the country’s 1.9 million retirees would eat up 24% of the government’s budget.
Venezuelan workers and the financial sector have been eagerly awaiting pension reform since 1998 when the previous government of Rafael Caldera approved a private pension fund system. When Chavez took office in February 1999, he immediately suspended that law pending a reform. The current state operated pension system has not worked in Venezuela with the government in constant arrears with payments and many workers having to pay bribes to pension officials in order to get on the pension rolls.