Annuities, retirement options in an individual capitalization system

Abstract

This article is a brief review of a research published by the Universidad Tecnológica de El Salvador this year, 2010, which systematizes the theoretical foundations of annuities as an alternative to paying retirement income in a conventional social security system; also developing some fundamental elements for its financial architecture, its relationship with social welfare schemes based on the accumulation of contributions for retirement, which are in force in several Latin American countries; It also identifies some legal difficulties that prevent the commercialization of these in El Salvador.
Here we intend to highlight the urgency of approving certain secondary regulations that facilitate the provision of these services in our country, in order to provide workers with sufficient options for retirement based on their personal longevity expectations, financial commitments they have when retiring. of the labor market, their financial knowledge and the level of risk they are willing to assume, among other important aspects to select alternative payment of these benefits.
The Law of the Savings System for Pensions (SAP) establishes, in its article 128, which are the modalities of pension that the worker can choose when he retires; However, in the absence of regulations governing the marketing of "pension" annuities, the rigorous application of the Law is impeded, to the detriment of the workers' social freedoms.
As a consequence, it can be affirmed that the exercise of certain rights to workers incorporated into the SAP is being prevented.