Military retirement privileges under fire in Uruguay.
| Autor | Gaudin, Andres |
Facing strong opposition from the armed forces, Uruguayan President Tabare Vazquez has been forced to postpone a pension reform plan that would have ended some of the privileges for retired military personnel. As details of the preferential treatment the government gives the military were unveiled and the public became outraged (NotiSur, Jan. 30, 2015), the military appealed to its political allies.
Best-paid retirees in the country
Civil society was unaware of the wide array of measures that allow retired military officers to enjoy a package of exceptional privileges, unavailable to other Uruguayans, that make them the best-paid retirees in the country. This discriminatory treatment backed up by a web of laws, resolutions, and decrees dates back to 1940 and was consolidated in the Organic Military Law imposed in 1974 by the civilian-military dictatorship (1973-1985). In 2015, the current minister of labor, Ernesto Murro, who was then head of the Banco de Prevision Social (BPS), spoke out about the underfunding of military pensions (Servicio de Retiros y Pensiones de las Fuerzas Armadas), the result of the high cost of these privileges. In round numbers, the state contributes US$80 million each year to the Caja de Pensiones (military pension fund), he said, and "for every peso that goes into the Caja, five come out. The other four pesos are provided by the pubic, through their taxes." Murro then asked: "Is it right that those officials who enjoy privileged retirements don't contribute to their own retirement fund?" Civilian retirees, in contrast, contribute 3% of their pensions.
Multiple privileges
Officers can retire after 20 years of service. Civilians must work at least 30 years to be vested. For the military, each year of service abroad--as a diplomatic attache or member of the United Nations peacekeeping force--are counted double. Army generals and officers of equivalent rank in the Air Force and Navy are forced to retire either at age 60 or when they have served eight years at those ranks. A coronel retires at age 55 and a lieutenant coronel at age 52 and receive 100% of what they earned on active duty. For civilians, retirement pay is 50% of their average salary for the last 10 years of employment, maxing out at US$1,300. Military pensions increase automatically, based on the median wage index. Civilian pensions depend on special adjustments. When forced to retire (because of age or years of service at a specific rank), military...
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