Table 8
Main Characteristics of the Five Pension Institutions in Honduras
IHSS
IMPREMA
INPREUNAH
INJUPEMP
IPM
496,000
70,906
6,519
51,663
20,745
Number of Retirees
22,000
13,987
589
9,617
2,710
Minimun retirement age (voluntary)
65m/65f
50
58
58
50/58
Maximum retirement age (voluntary)
N/A
60
70
65
N/A
15 years
10 years
25 years
10 years
25 years
3.50%
19%
19%
18%
24%
Last 180 month’s pay
Last 36 month’s pay
Last 36 month’s pay
Last 36 month’s pay
Last 60 month’s pay
12/14
12/14
13/14
12/14
13/14
Number of Contributors
Minimun contribution period Contribution rate (% of base salary) Average monthly salary for calculating pension Number of contribution year/benefits paid each year
combined with a rapid demographic transition, expansion of benefits without the corresponding financing, low returns on equity reserves, and high administrative costs, has resulted in the financial inability of the institutions to pay out benefits to all of their participants. In fact, if INPREMA face problems recovering its investments and the government would have to assume those obligations, contingent liabilities estimated at 27 percent of GDP would become real in 2013, such that the
value of the public debt as a percentage of GDP would increase from 19 percent in 2011 to 44 percent in 2031. In the same way, the value of the public debt over revenue would increase from 85 percent to 195 percent, and debt service would increase from 14 to 37 percent of revenue.24 Furthermore, actuarial studies indicate that in order to be able to keep delivering benefits and expand coverage in the IHSS, it is necessary to adjust—on a step basis over the long term—the current contribu-
24 INJUPEMP’s financial-actuarial problems are similar to those of INPREMA, but are more long term, given that contributions to be received in the short and medium terms are expected to generate temporary growth in equity reserves.
80
Part II · Chapter III