#CostaRica 🇨🇷 #LaborAlertBDS: Regulations on Disability, Old Age and Death Insurance (IVM in Spanish)

On Tuesday January 11, 2022, a number of reforms to the Regulations on Disability, Old Age and Death Insurance (IVM in Spanish) enacted by the Costa Rican Social Security Administration (CCSS), were published in the Official Gazette.

As reported by the Costa Rican Social Security Administration (CCSS), such reform “results from the institutional strategy to strengthen the IVM insurance, aimed at improving the sustainability and solvency thereof, ensuring a balance between revenue and expenditure for the next three decades”.

Some of the changes covered by this reform include the following:

• The old age pension right for men and women remains effective at age 65.
• The right to old age-based early withdrawals for men is eliminated. The right to early withdrawals for women remains effective, but adjusting the minimum age to 63 years with 405 contributions in order to qualify for these withdrawals, and for older people in accordance with the provisions of article 5 of the IVM Regulations.
• The Reference Average Salary (SPR in Spanish) has been established as the average of the highest 300 salaries reported (25 years) throughout the employee’s working career, adjusted to current value.
• The SPR is used as Location Salary (SU) to set the basic benefit range of the contributing worker.
• The additional amount (0.0083%) must be accounted for as from a 25-year contribution period, instead of 20 years as it is currently calculated.

In the authorities’ opinion, this will help the IVM regime to remain sustainable “at least until 2050, that is, an additional 15-year extension to the reserve’s adequacy as from 2037”.

These reforms will become effective 24 months following their publication, that is, on January 11, 2024.