The Minister of Labor, Rolando Castro, affirmed that more than one hundred thousand workers in El Salvador will not be able to retire in the time stipulated by law, because their employers illegally withheld the AFP quotas, which constitutes a crime which is punishable by jail.
“More than 100,000 workers in El Salvador affected because the employers do NOT send the legal withholdings and keep that money abusively and illegally,” said Castro, and at the same time reiterated that this is not just an administrative fault, but a criminal offense considered “appropriation of labor quotas,” he sentenced.
The official emphasized that the irresponsible actions of the employers have caused these hundred thousand workers a series of “irreversible damages”, since they will not be able to retire at the agreed times because the employers kept the contributions. «It is money that must be earning interest and retirement is greater. No more impunity,” he added.
The Legislative Assembly approved last December the Comprehensive Pension System Law, as well as the Law for the Creation of the Salvadoran Pension Institute (ISP), and the Special Law for the Issuance of Certificates of Pension Obligations and Dissolution of the Pension Obligations Trust ( PFO).
The new legislation maintains the retirement ages for women at 55, and for men at 60. With the 30% increase in contributions, the minimum retirement amount that Salvadorans will receive, including those who are already pensioners, it will be $400.
The contribution period to retire will continue to be a minimum of 25 years of work and the life pension will be maintained at the end of the balance of the Individual Savings Account for Pensions (CIAP).
In addition, compatriots residing abroad may voluntarily contribute to the system to receive the benefits of profitable, safe pension savings in El Salvador.
Similarly, it was established that the contribution rate of the system is increased by 1%, so it went from 15% to 16%. This increase is now assumed by the employer, reaching 8.75% and maintaining the worker’s contribution at 7.25%.
