The Government of Costa Rica has presented a bill aimed at establishing a single cap on pensions from various public systems, as a measure to ensure sustainability and eliminate so-called 'luxury pensions.' Costa Rican President Rodrigo Chaves expressed his opposition to these pensions, which he described as an 'abhorrent cancer,' during a press conference, mentioning that they were legalized by previous legislatures.
The proposal seeks to align pension systems with the maximum cap of the Disability, Old Age, and Death (IVM) regime of the Costa Rican Social Security Fund, which all private sector workers and some public sector workers are required to contribute to, with a current limit of 1,765,000 colons per month. The project includes reducing the highest pensions by up to 40%, following what the law and international agreements allow.
President Chaves emphasized that the bill is based on actuarial studies that consider that beneficiaries of 'luxury pensions' should have contributed 60% of their salary during their working life to receive the current pension amounts. During the presentation, the government displayed a 'top 10' list with names and photos of people receiving monthly pensions between 6,000 and 30,000 dollars, which are considered excessive.
It was reported that annually the Costa Rican state allocates 265 billion colons (approximately 525 million dollars) to these high-value pensions, an amount that, according to the government, could be used for the construction of educational centers and police stations. President Chaves criticized the Judiciary and opposition parties for these situations, although he indicated that to make structural changes, it would be necessary to wait until 2026, the year of the next presidential and legislative elections.
