Paraguay’s Lower House Rushes Plan to Raise Cap on IPS Funds

Paraguay’s ruling Colorado faction is rushing a bill that critics say could open the Social Security Institute’s funds to greater use and benefit a bank linked to President Santiago Peña’s former business partners.

The proposal, formally described as an emergency declaration for the Institute of Social Security, or IPS, and an extraordinary regime for financial recovery and protection of its sickness and maternity fund, is scheduled for possible consideration by the Chamber of Deputies’ Accounts and Oversight Committee. The committee is chaired by Colorado lawmaker César Cerini.

The bill returns to the lower house for a third stage after major changes in the Senate. Under the Senate version, the current rule limiting deposits in one financial institution to 10% of IPS assets would apply separately to certificates of deposit, bonds and current-account deposits. Critics say that structure would effectively allow more than the current overall limit to be placed with one institution.

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A law that was supposedly for buying medicines ultimately became a law for making money. You really have to be willing to make money from health care and retirees’ money.

In the lower house, the bill had been presented as a way to help IPS respond to shortages of medicines and infrastructure deficiencies. Raúl Benítez, an independent lawmaker, said the Senate had distorted that purpose. “A law that was supposedly for buying medicines ultimately became a law for making money. You really have to be willing to make money from health care and retirees’ money,” he said.

Benítez also said the proposal had originally been linked to assurances for IPS official Isaías Fretes after Fretes warned that medicines would run out in August. He called the amended bill an “aberration” for citizens. The article also says dissenting Colorado lawmakers have distanced themselves from the Senate version, but the supplied text ends before their position is detailed.

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aberration