Observation (CEACR) - adoptée 2000, publiée 89ème session CIT (2001)

The Committee has studied the provisions of Act No. 1732 of 29 November 1996 concerning pensions and its regulation (Supreme Decree No. 24469 of 1997) which replaces the old pension system based on share-out and administered by the Bolivian Institute of Social Security, a public body, with a completely new system based on individual capitalization of the insured person’s assets and managed by private bodies ("Administradoras de Pensiones" (AFP)). The Committee has also noted the information supplied by the Government in its report along with the comments made by the Bolivian Central of Workers (COB).

In view of the fundamental changes introduced by the new legislation, the Committee emphasized in its previous comments that the Government should report in detail allowing it to assess whether the new pension system continued to ensure application of the Convention. In this regard, the Committee notes with regret that, first, the Government’s report is limited to a brief description of the major provisions of the Act and that, secondly, the reply it contains to the new comments made by the Bolivian Central of Workers concerning the sale of the property belonging to the old supplementary schemes consists solely of a reference to the provisions of the Act and the responsibility of the Ministry of Finance ("Ministerio de Hacienda"). In these circumstances, the Committee is bound to reiterate the hope that the Government will not fail to supply a detailed report on the implementation of the reform in the light of each Article of the Convention, containing all the statistical information required by the report form. The Committee also wishes to draw the Government’s attention to the following specific points:

1.  Scope.  The new system covers compulsorily persons who are in a dependent employment relationship while others may be affiliated on a voluntarily basis (sections 5 and 24 of Act No. 1732 and section 109 of the Decree). In order to ascertain better in practice the extent of cover of the new pensions regime in relation to the provisions of Articles 9, 16 and 22 of the Convention, the Committee would appreciate the Government providing with its next report all the statistical information required by the report form under these Articles of the Convention.

2.  Level of benefits:  (a)  Invalidity and survivors’ benefits (sections 10 and 23 in relation to Article 26 of the Convention).  According to sections 8 and 9 of the Act and section 41(c) of the Decree, the invalidity and survivors’ benefits (paid to a widow with two children) may not be less then 70 per cent of the insured person’s basic salary. Given that a maximum is prescribed for the basic salary serving for calculation of the abovementioned benefits (60 times the minimum national wage in force, according to section 5 of the Act), the Committee trusts that the Government will not fail to supply all the statistical information required by the report form under Article 26 of the Convention (Titles I, II and IV).

(b)  Old-age benefits (section 17 in relation to Article 26 of the Convention).  The Committee notes that, according to section 7 of the Act, the amount of the pension depends on the capital accumulated in the worker’s individual account. In addition, pursuant to section 17 of the Act and sections 18 and 19 of the Decree, the pension may take two different forms according to the type of contract selected. If the affiliated person chooses a life annuity contract, the amount of the pension will be fixed and will correspond to at least 70 per cent of the minimum wage in force; if the affiliated person chooses a variable monthly annuity contract, the amount of the first pension payment will also correspond to at least 70 per cent of the minimum wage in force; subsequently, the amount of the pension will vary as a function of the mortality of the group of pensioners who have selected this pension system as well as the return on the variable monthly annuity account. In order to ascertain whether the amount of the old-age pension paid by virtue of the new Act on pensions amounts at least to the minimum prescribed by the Convention (45 per cent of the reference salary when the affiliated person has completed 30 years of subscriptions or employment), the Committee would be grateful if the Government would supply all the statistical information requested by the report form on Article 26 of the Convention, Titles I and III.

3.  Reduced old-age benefits (section 18 in relation to Article 19 of the Convention).  According to section 13 of the Decree, if the old-age pension resulting from the accumulated capital is lower than 70 per cent of the minimum salary in force, the affiliated person may withdraw from his account, from the age of 65 onwards, monthly amounts equivalent to 70 per cent of the said minimum salary until the capital accumulated in his account is exhausted. The Committee wishes to draw the Government’s attention to the fact that in application of Article 18, paragraph 2(a), of the Convention reduced old-age benefits must be guaranteed at least to a person protected who has completed, prior to the contingency, a qualifying period of 15 years of contribution or employment and that this reduced benefit must be provided throughout the contingency in accordance with Article 19 of the Convention. The Committee would be grateful if the Government would supply detailed information on how effect is given to the Convention on this point.

4.  Duration of benefits (Articles 12, 19 and 25).  The Committee would be grateful if the Government would supply detailed information on how effect is given to these provisions of the Convention which stipulate that benefits must be granted throughout the contingency (or, for invalidity benefits, until an old-age benefit becomes payable), whatever the type of pension chosen (life annuity contract or variable monthly annuity contract). Please indicate in particular whether, whatever the type of pension chosen, the invalidity, old-age and survivors’ benefits at the level prescribed by the Convention are guaranteed for a standard beneficiary throughout the contingency (or, for invalidity benefits, until an old-age benefit becomes payable). More particularly, on variable monthly annuity contracts, the Committee would be grateful if the Government would supply detailed information on the impact in regard to Articles 19 and 25 of the Convention of section 19 of the Decree under which the amount of the variable monthly annuity will depend on the mortality of the group of pensioners having selected this method as well as on the profitability of the variable monthly annuity account.

5.  Age of eligibility for a pension (Article 15).  The Committee notes that, according to section 7 of the Act on pensions, the age of entitlement to old-age benefits is 65 years, unless the capital accumulated by the insured person in his individual account before that age is sufficient to allow payment of a pension equal to at least 70 per cent of the basic salary. The Committee recalls that, under the former share-out system, the age of entitlement to a pension was 55 years for men and 50 for women. The Committee wishes to draw the Government’s attention to the fact that in application of Article 15, paragraph 3, of the Convention, the age for entitlement to a pension shall be less than 65 years in respect of persons who have been engaged in occupations that are deemed to be arduous or unhealthy. The Committee also recalls in this respect the comments of the COB which emphasizes that average life expectation in Bolivia is less than 65 years. The Committee would therefore be grateful if the Government would indicate in its next report the measures taken or envisaged to respond to this concern in the light of Article 15, paragraph 3, of the Convention.

6.  Revision of benefits (Article 29 of the Convention).  The Committee recalls that, under Article 29 of the Convention, the amount of invalidity, old-age and survivors’ pensions shall be reviewed periodically following substantial changes in the general level of earnings or substantial changes in the cost of living. The Committee notes in this regard that sections 2, 4 and 320 of the Decree provide an adjustment procedure for pensions being drawn and in course of acquisition, based on the devaluation of the national currency in comparison with the United States dollar. The Committee would be grateful if the Government would provide detailed information on the application in practice of these provisions of national legislation. Please also provide all the statistical information required by the report form under this Article of the Convention in regard to pensions currently being drawn.

7.  Maintenance of rights in course of acquisition (Article 30 of the Convention).  Referring to the comments of the COB, the Committee would be grateful if the Government would supply detailed information on the application in practice of the provisions of the new legislation on pensions in regard to maintenance of rights in course of acquisition for persons affiliated to the old share-out system who, at the moment of entry into force of the new pensions scheme, had not yet reached the age of 55 years for men and 50 for women.

8.  General responsibility for the due provision of the benefits provided and for the proper administration of the system (Article 35 of the Convention). Referring to the comments of the COB, the Committee would be grateful if the Government would supply with its next report detailed information on how effect is given in practice to Article 35 of the Convention.

The Committee would also be grateful if the Government would indicate how payment is ensured for invalidity, old-age and survivors’ pensions due under the old pension system based on share-out as well as revision of these pensions to take inflation into account.

9.  Participation of representatives of the persons protected in the management of the new pensions system (Article 36 of the Convention).  The Committee recalls its previous comments regarding Article 36 of the Convention which provides that representatives of the persons protected shall participate in the management of the system. It trusts that the Government will not fail to indicate in its next report how effect is given to this provision of the Convention.