Panamanians Protest Law 462, Opposing Privatization of Social Security

Tens and thousands of Panamanians took to the streets across the country to protest Law 462, a measure aimed at privatizing the nation’s Social Security system on March 18. The demonstrations were led by the Single National Union of Construction and Similar Workers (SUNTRACS), which represents over 50,000 members. The law, which includes a shift to individual accounts for pensions, has sparked outrage among workers who argue that it primarily benefits financial institutions rather than citizens.

In a statement SUNTRACS stated that, “ "This law turns pensions into private enterprises, leaving workers with paltry benefits. Social Security should protect the welfare of people, not serve as a profit model for a select few.” Other unions, like the National Confederation of Independent Trade Union Unity (CONUSI), also joined the protest calling for continued resistance against the law, mining, and dam projects.

Despite widespread opposition, the law passed in Panama’s National Assembly with 48 votes in favor and 23 against. President José Raúl Mulino signed the bill into law shortly after, claiming that the reform would ensure the sustainability of Panama's Social Security system by investing over a billion dollars annually and requiring additional sacrifices from employers. He also suggested that the changes, including increased retirement age and higher taxes for contributors, were part of a democratic process.

However, several reports suggest that the law introduces unnecessary financial intermediaries to manage the country’s pension funds, even though the institution itself has more than $10 billion in assets. These intermediaries would manage the funds of contributors, raising concerns about the increased privatization of Social Security. Furthermore, the law changes how retirement benefits will be calculated, tying them to the performance of individual accounts.

This law represents a severe setback for social security in Panama, particularly with the shift to a privatized individual capitalization system that has failed in other countries. Despite the law's approval, union leaders vow that their struggle will continue. They said that they will remain steadfast in their opposition, and declared that the fight for the Social Security Fund is not over. "Social Security is a right, not a business,” they asserted, calling on Panamanians to stay vigilant and engaged in the ongoing resistance.