Risk of Disability, Old Age, and Death

Risk of Disability, Old Age, and Death

Risk of Disability, Old Age, and Death, This is the program aimed at paying cash benefits, in the form of pensions or compensation, in the following cases:

  • When you suffer from a disabling illness that does not allow you to continue working and that is not the product of a work-related illness or accident.
  • By reason of age.
  • Upon the death of the insured or pensioner.

As long as they comply with the requirements established in the law and its regulations.

Covered Population

  • Workers in the public or private sector.
  • Voluntary policyholders.

Income and its Management

To cover program expenses, the law establishes as income:

  • Of the worker’s monthly fee, a sum equal to 6.75% of his monthly salary.
  • Of the monthly quota of the employer or employer, a sum equal to 2.75% of the salary of their workers.
  • From the monthly quota of the voluntary insured, a sum equal to 9.5% of their base salary.
  • The entire fee paid for sickness and maternity benefits of 7.25% of the amount of the subsidy.
  • The entire 18% fee is paid on the three items of the XIII Month, received by the worker, public or private.

The annual subsidy from the State to offset the interest rate on investments held by the Social Security Fund in State documents whose yield is less than the market rate and which may not be less than 20.5 million balboas.

  • The returns or interests produced by the investment of the reserves of this program.


Since the benefits or benefits of this program are payable in the long term, the law determines the need to set up a reserve for their payment.

The amount of this reserve at the end of each year must be equal to the sum of the pension coverage capitals that are being paid at that time. Understanding that the Coverage Capital represents an amount of money that, invested, will allow the pensioner to pay his pension until the moment in which he ends the right to it or dies.

This way of constituting the reserves is what determines the so-called Inter-Generational Solidarity.

The contributions do not belong to any insured in particular, but to the group that receives the benefits in full; so that those who contribute in a year do so so that the capital coverage of those who retire in that year can be constituted, that is, each generation contributes contributions so that the generation that precedes it is guaranteed its pension.

The system is then based on the fact that: There will always be younger generations that will produce enough income to guarantee the payment of the benefits of those who retire.

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