Cuban regime modifies pension system and reduces the highest ones

The Cuban regime modified the system for calculating the pensions due to age and disability in the country, “as a consequence of the transformation process in the distribution of the population’s income.”

The regulation seeks to reduce the expense from the budget of the social security system, amid rapidly aging population and an increase in the number of people reaching retirement age.

“As a result of the payment for the distribution of profits, pensions with high amounts have been generated, hence it is required to modify the procedure to determine the calculation base for pensions due to age and total disability, in order to reduce social security budget expenses,” stated Decree 99, published in the Official Gazette Ordinary number 1 of 2024.

The basis for the calculation of the pension due to age and total disability will be determined on the average monthly salary that results from the highest salaries earned by the worker during five years, selected from the last fifteen natural years prior to the application for the pension.

However, profits, which “are part of the calculation base for long-term benefits,” will be subject to another calculation.

Without considering that the elderly in Cuba are one of the social groups that suffer the most shortages, the State will remove a percentage of the total to not affect its budget.

“Up to nine thousand five hundred ten pesos, one hundred percent is considered as the calculation base for the pension. For the excess of nine thousand five hundred ten pesos up to nineteen thousand twenty pesos, sixty percent is applied. For the excess of twenty-eight thousand five hundred thirty pesos, twenty percent is applied,” the text indicates.

The modification also responds to the duration of the stay as a pensioner, as well as to the “decrease in contributors to the system due to the non-replacement of the employed workforce.”

Meager pensions in Cuba

As part of the so-called “Task of Reorganization,” the Cuban regime set the amount of the minimum pension due to age and total disability of the general Social Security system at 1,528 Cuban pesos in 2020.

The figure was contemplated in the transformation and “the distribution of the population’s income in terms of salaries, pensions and social assistance benefits in the context of the country’s monetary reorganization,” in addition to the monetary unification.

The pensions granted by the general Social Security system would increase in correspondence with a scale, which had as a minimum figure 1,528 pesos (for those who earned between 280 and up to 300 pesos); 1,578 (amount of 320 pesos); 1,628 (amount of 350 pesos); 1,678 (for those who earned between 385 and 445 pesos); and 1,733 (for those who received from 446 to 500 pesos).