Dominican Republic's Pensions Superintendency outlines pension reform plan to cut lifetime pension eligibility to 15 years and raise solidarity funding

In a podcast interview, the Dominican Republic's Pensions Superintendency, through Superintendent Francisco Torres, outlined the main problems in the pension system and the proposed solutions in the reform of Law 87-01. Torres said the central issue is not the headline pension amount but the risk that retirees exhaust their savings before death, as high labor informality and movement between formal and informal work prevent many workers from meeting current contribution thresholds. Citing actuarial studies with the International Labour Organization and the World Bank, he said about 80% of the system's 5.6 million affiliates are projected not to reach the 25 years of contributions needed for a guaranteed minimum lifetime pension. The reform proposal would reduce that minimum from 25 years to 15 years, which Torres said would allow about 2.2 million additional people to qualify for the lifetime guarantee. To support that expansion, the Solidarity Fund contribution would rise gradually from 0.4% of salary to 1.25% over 10 years. Torres said the fund currently holds more than DOP 100 billion and argued that benefits must be balanced with long-term system sustainability and broader coverage. He also described a systemwide procurement of annuity insurance to avoid adverse selection, outlined complementary pension plans based on voluntary savings with tax benefits and permitted uses including a first home, higher education and high-cost medical expenses, and said new contributors would be automatically enrolled at a suggested 2% contribution with an opt-out. The reform also contemplates mechanisms to bring independent and self-employed workers into pension coverage through deductions via the tax system and digital platforms.