In ES, disabled workers face uphill battles(1)

Eric Saúl Majano stares blankly up at the ceiling in the government office in the Salvadoran capital that he is visiting to seek a disability pension, since he has been unable to work since 2002 due to schizophrenia. But achieving his goal will not be easy.

"I see and hear things that aren't real; that's why I can't work," Majano, 37, explains after leaving the doctor's office where he was examined.

Since El Salvador's social security system was privatized in 1998, 35 percent of the 18,000 workers who have applied to the government commission that evaluates eligibility for a disability pension, the CCI, have been turned down after medical exams on the grounds that their degree of disability does not warrant a pension under the new rules.

The law establishes that in order to be eligible for a partial pension, the disability or impairment must be at least 50 percent, and for a full pension, 70 percent.

But people seeking disability pensions say the CCI is under pressure to rule against workers in order to benefit insurance companies, which cover risk of disability and death.

"The Commission should be more fair; it should look out for people's interests, and its rulings should not be handed down to please the owner of a company," Dinora Roldán complained. The 54-year-old woman, who has epilepsy, sued the CCI in 1999 because it only awarded her a 35 percent disability rating, which made her ineligible for a pension.

Roldán's case went all the way to the Supreme Court, and after a 12-year legal battle, she will finally begin to receive a pension this month.

A full disability pension in the private social security system is just over 200 dollars a month.

The pension system in this Central American country was privatized along the lines of the Chilean model, moving from a government-run pay-as-you-go system to one of individual accounts for workers administered by private operators.

Since then, more than two million people, or 37 percent of the population, have been required to shift to the new system – an attractive business opportunity for the pension fund administrators, whose source of clients is guaranteed by law.

Only workers who were over 50 in 1998 remained in the old public institutions, which were gradually phased out as participation in the new system was mandatory for the rest.

There have been constant complaints that the rules tend to benefit the financial groups or business owners who run the system, with stricter requirements, for example, when it comes to granting disability pensions or death benefits.

The system includes two pension fund administrators, or AFPs, which charge administrative fees of 1.2 percent of the 13 percent of the workers' salaries that are contributed to the retirement accounts, and insurance companies, which charge a 1.5 percent fee to cover risk of disability or death.

As of September 2010, the insurance industry had earned 324.7 million dollars in the new system. Of the 20 companies in the sector, only a few won the tender to offer disability coverage to AFP clients.