Government says its wants to raise the retirement age

While teachers were protesting in the street Wednesday, and other labor groups continue to be enraged by potential salary cuts, the central government added fuel to the fire.

As an aside to a statement about luxury pensions, Casa Presidencial said that the government backs a plan to raise the retirement age to 70 and also suggested that the amount deduced from employee paychecks for health and pensions could nearly double.

The Presidencia was responding to a news article that said leading political parties in the legislature were backing away from a proposal to cut what are called luxury pensions. They are pensions that have been fixed with annual increase, and sometimes the monthly amount is excessive. The government said it wanted to enact strong curbs.The government also said it wanted to base pensions on standards issued by the International Labour Organization.

But then the statement said that the government also wants to raise the retirement age by five years to 70, doing so over five years.

Then it also said that the monthly contribution of workers that is now 9 percent should be raised to 16 percent. The statement was unclear if the increase would be in the total social charges workers pay each month or just the part that goes for pensions.

Workers now face deductions of 9 percent that go to the Caja Costarricense de Seguro Social, to Banco Popular and a disability and death benefit fund.

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