A well-earned retirement… that is what, sooner or later, we all hope to enjoy. But as obvious as this may be in the Netherlands, as uncertain it can be for the elderly in Ecuador!
The pension system in this country roughly consists of three pillars: The primary pillar is the national insurance, called IESS, a public system financed by contributions from both employees and employers. These contributions are paid monthly and are used for pensions and health expenses, among other things. The pension benefit is capped and ranges between 210 and 2,300 euros per month. The amount depends on one’s age, the number of years worked and one’s salary during the five best-paid years. If, for whatever reason, you don’t have an employer, you can make voluntary contributions instead.
Unfortunately, however, the poorest segment of the population, mostly active in informal jobs, lacks these economic resources. This means that only 40% of the working population can save for this type of pension. The remaining 60% must make do with a senior citizen's pension of a paltry EUR 45 a month. This is the Ecuadorian equivalent of the state pension, constituting the second pillar.
