Bolivia cuts retirement age, nationalizes pensions

Business Week via AP ^ | December 3rd 2010, | CARLOS VALDEZ

[Cardhu]

LA PAZ, Bolivia

Bucking a global trend, leftist-led Bolivia is lowering its retirement age and nationalizing its pension funds.

Bolivia's Congress approved legislation early Friday to make Bolivians eligible for full pensions at age 58. The country's 70,000 miners will get to retire two years earlier.

The previous retirement age was 65 for men and 60 for women.

Bolivia's decision to lower its retirement age runs counter to a global trend to raise retirement ages as life expectancies rise, birth rates drop and national treasuries come under strain from pension obligations. France raised its minimum retirement age to 62 last month -- full benefits aren't available now until 67 -- while Greece is drastically cutting back early retirement opportunities.

President Evo Morales had pushed hard for the pension reform law, which also brings the landlocked Andean nation's pension system under state control and extends pension protection to the 60 percent of Bolivians who work in the informal sector and currently lack pensions.

Morales is expected to sign the law, which is scheduled to take effect in mid-2011.

Bolivia's Federation of Private Employers opposed the law, expressing skepticism the new system will be sustainable. Thirteen years ago, Bolivia privatized its pension funds after a state-run system collapsed.

[Cardhu]

It seems reasonable for people, like miners, whose work is physically hard and who have worked under those conditions for at least 15 years should be able to retire before office workers.

Generally, their health because of their working conditions is much worse than sedentary workers as they age.

[GeronL]

This will bankrupt the taxpayers of course, not that the socialists care.

[goldstategop]

Its unsustainable... people who don’t work are a drain on the government coffers. If every one stopped working today, when is the last time they would get paid? Unless the government can keep on printing money to pay the pensions.

Here in America a lot of those are simply IOUs. The money was never set aside for people to draw on when they are ready to retire. It will be no different in Bolivia.

[Brad from Tennessee]

I agree. Anyone who has spent their life in a mine has a bad back, poor hearing from blasting, and respiratory disorders from the dust.

[vaudine]

Early retirement AND adding 60% of the people without pensions--oh yeah! That is sustainable, all right!--kinda like giving health care to 30,000.000 uninsured and also lowering overall cost. Don't they teach math anywhere any more?

Even I get it! And math was never my strong suit.

vaudine

[eyedigress]

Well, OBAMARAMA probably guaranteed their pension with a gazillion dollars so why not.

[piytar]

Maybe, but this part: “nationalizing its pension funds” guarantees this will be a colossal train wreck...

[Blood of Tyrants]

Socialists are always making promises that they want others to pay for.

[ikka]

Sure you will give x pesos per month ... but how many loaves of bread will those pesos bring you?

[Pining_4_TX]

Of course it would be great, and it would also be nice if we could all retire at age 50 and live to be 100, but that is not possible. Someone has to work to pay for these miners’ retirement benefits, so in effect, they become slaves. That is what it means to be forced to labor for the benefit of another. People simply stop producing when what they produce is confiscated, no matter how “good” the reason is for taking it.

I’m hoping all the believers in the free lunch move to Bolivia now.

“The level of production needed to sustain a welfare state cannot be sustained by a welfare state.” ~ Richard W. Fulmer

[wildbill]

Perhaps they believe it will be sustainable because of the growth in worldwide cocaine markets. Didn’t Bolivia recently legalize cocaine production?

Once the new-rich elites of previously Third World ecoonmies like China, Brazil, and India become enamoured of the drug of choice for the ‘hip’ in society, the S. Americans will be awash in more drug profits which the cartels share with the government and politicians.

[Strk321]

““The level of production needed to sustain a welfare state cannot be sustained by a welfare state.””

The main reason why a welfare state works in countries like Sweden (and this is the part liberals never understand) is that we’ve been defending Europe since WWII, and so they don’t have to spend much of anything on their militaries. Either that or the country has some valuable natural resource like oil or gas that pays for the welfare state.

[Leisler]

Yup. It’s theft on government scale( but at least they’re good at something )

California with it’s present tax rate, fines fees, permits, licenses is half a trillion short. Chicago is 43 billion short and talking about doubling real estate taxes.

Fedgov is trillions short.

( Yes, we will print )

[caver]

You’ve just made the case for miners(union workers) to retire earlier and let the rest of the country pay for it. I don’t believe your line of employment deserves any special consideration concerning retirement. They chose their line of work. And who says that miners work any harder than office workers?

[strongbow]

So they will be getting their 10 pesos a month retirement check two years earlier. Probably not going to make much impact on the dirt poor country. Only been there once and it really is a wretchedly poor place. Just another sad result of socialism spreading poverty equally.