July 3rd, 2014 (InsideCostaRica.com) A study by the Ministry of Finance revealed last month significant discrepancies in the pensions awarded to former public employees, most importantly the extremely high pensions received by some former public officials, ministers, and lawmakers in comparison to other public employees.
Some 15% of all government pensions exceed ¢2,600,000 per month. Many others exceed ¢6 million per month, such as the ¢6.1 million per month paid to the current education minister, Sonia Marta Mora, for her previous posts. In one case, a former ambassador is receiving a monthly pension of ¢16 million, or about $30,000 per month.
But what officials appear to have failed to notice is these lofty pensions are apparently illegal.
Law 7,858, which was adopted on December 21st, 1998, sets the maximum amount of state-funded pensions to 10 times the minimum wage for the job of a secretary working in the public sector.
This year, that limit would be ¢2.3 million per month. Regardless, 952 former public officials are receiving more than the limit, apparently because those in charge of the country’s pension scheme failed to ever apply the law, or appear to be ignorant of the fact the law is even on the books.
“We will analyze this mechanism (the limit on pensions) as a way to confront the issue of pensions,” said Finance Minister, Helio Fallas.
The Superintendent of Pensions, Edgar Robles, said that retroactively applying the law would be almost impossible. “We could apply it moving forward, but we should consider it carefully, because it will likely go to the courts as those concerned will try to defend themselves,” Robles said.
Comptroller General Martha Acosta called the new government’s attention to the matter of exorbitant government pensions last month, saying the government is currently spending more than ¢655 billion (about $1.2 billion USD) annually on pension payments, representing an average of 2.6% of the country’s GDP and more than 10% of the government’s entire annual budget.
Worst still, most of that spending is financed through debt.
Acosta said the situation is “unsustainable over time.”