Noboa vetoes the Social Security Law that was Henry Kronfle’s initiative

2024-08-06 18:43:22

On July 9, President Daniel Noboa vetoed the entire bill. Reform Act to Various Laws for the Stability of Social Security in Ecuadoran initiative that came from the head of the Assembly, Henry Kronfle.

This bill was approved on June 6, 2024 with 74 votes in favor and sought to ensure “the stability and efficiency of the administration of the Social Security Systemthrough transparent management of member funds.”

What did this bill propose?

1. 1) BIESS may hire a national or international company with the capacity and specific experience in investment banking consulting focused on pension or social security systems. The consulting included at least the analysis of risks, profitability, security, liquidity and diversification of the investments made by the Bank.

2. 2) Seed credit to entrepreneurs or small businesses to finance their initial or start-up activities under favorable conditions, with lower interest rates and longer repayment terms than traditional commercial loans.

3. 3) That BIESS make its investments transparent through the permanent publication of all the details of each of its investments and, if possible, with an indication of the rate of return, term, amount, level of return, risk analysis and beneficiary of the information.

Why did the Government oppose it?

There was objection to points one and three above. For example, it is stated that “the publication of information on each and every one of the investments is contrary to the principle of reserve and secrecy regarding the assets of financial institutions, both public and private…».

Henry Kronfle considered this veto as an action “against the people” and “a blow to citizens’ pockets.” “The current administration wants to keep the money of IESS members and retirees as petty cash,” he posted.

With the total veto, the Assembly cannot deal with this bill after one year from the date of objectionAfter this period, the National Assembly may ratify it in a single debate, with the favorable vote of the qualified majority of its members, and will immediately send it to the Official Register for publication.