The headline story in most of the newspapers today, Monday, 22 October is the news that President Danilo Medina has issued a decree ordering the suspension of contributions from public funds that the State has been making to plans and complementary pension funds for government employees. He also instructed the return of resources supplied to those plans and complementary funds to the institutions for their proper use within the framework of their budgets for corresponding expenditures. Decree Number 616-12, dated Saturday, 20 October, establishes that the Controller General of the Republic shall suspend the contributions that both the Central Government as well as the autonomous and decentralized financial and non-financial institutions, instituted by law, the public social security institutions, public financial and non-financial institutions, municipal governments, and the National District are making.
In article 2, the decree establishes that the public institutions may create complementary pension funds, “as long as they are sustained by the defined contribution made exclusively and only by the affiliates and based on the individual capitalization, which ensures its financial sustainability and economic balance.” It also instructs the Superintendence of Pensions (SIPEN) to decide the contributions made by the affiliates of those complementary plans. “The disposition (by Medina) prevents the institutions from making any inappropriate use of their directors and employees’ pension plans, while also sending a clear signal of his commitment to the appropriate use of public funds,” says a statement by the Presidential Communications Director, explaining the decree.
The decision comes after President Medina fired the Controller of the Republic Haivanhoe Ng Cortinas for allocating government funds to the Pension Fund of the Superintendence of Banks. In his previous post, he was the Superintendent of Banks.
President Medina named Rafael Antonio Germosen Andujar, the new national controller on Friday. The new controller as in charge of corporate auditing at the Banco de Reservas and related financial institutions.
The Ng Cortinas case brought to the open the billions the government disburses to fund pensions of government executives, primarily in decentralized organizations.