Workers in Costa Rica’s main public pension system could need five more years of contributions before they can retire, receive a smaller share of their salary once they do, and pay part of their pension toward health coverage, under 20 reform proposals now before a national dialogue convened by the Costa Rican Social Security Fund (CCSS).
The technical panel on the Disability, Old Age and Death (IVM) regime held its opening session yesterday. Jaime Barrantes, the CCSS pensions manager, confirmed that the panel will work from the 20 proposals and has a one-year timeline, with results expected around October 2027.
The IVM is our largest pension program and according to figures the CCSS presented in May, it has about 1.78 million contributors, covering roughly 63% of the workforce. It operates alongside the mandatory supplementary pension (ROP), which is managed by pension fund operators.
The proposal with the greatest consequence for future retirees would raise the minimum number of monthly contributions required for an old-age pension from 300 to 360, the equivalent of moving from 25 to 30 years of work. Barrantes has said the package does not raise the normal retirement age.
A second proposal would lower the IVM replacement rate, the share of a worker’s reference salary paid out as a pension, from the current range of 43% to 52.5% to between 40% and 43%. CCSS planners have framed that change around a combined IVM and ROP replacement rate of about 60%.
Current retirees would also be affected. One measure would require IVM pensioners to contribute 5% toward the CCSS health insurance program, a deduction already applied to retirees under the teachers’ and judiciary’s pension systems. Another would apply a solidarity contribution, at a rate not yet specified, to the highest pensions, and a third would calculate the minimum pension independently rather than tying it automatically to the minimum contribution base.
Barrantes said the CCSS is not proposing higher contribution rates or new taxes at this stage, and is instead focused on gradually reallocating existing spending. One measure would redirect to the IVM the 0.25% employer contribution that now flows from Banco Popular to the ROP. Another would shift to the IVM the employer charges that currently fund the National Training Institute (INA) and the Social Development and Family Allowances Fund (Fodesaf), about 7.25% of payroll charges, which would place the IVM contribution rate between 15% and 16%.
According to Barrantes, that shift would be offset by fiscal space freed up as pensions paid from the national budget decline. Costa Rica devotes around 10% of its national budget to pensions, mostly for former public employees in special regimes that are already closed, and that spending is expected to fall over the next 30 years. He said the IVM represents about 4% of GDP and that roughly two percentage points of that warrant analysis.
The broader package includes automatic enrollment of self-employed workers in the ROP with the option to opt out, more flexible coverage for platform and online workers, and a so-called consumption pension that would direct 1% of value-added tax to voluntary retirement accounts. Other items would reward workers who retire after age 65, recognize contributions for women based on the number of children they have and their caregiving responsibilities, and diversify IVM investments into public works and international markets.
The proposals came from an interinstitutional team that included the CCSS, the Superintendency of Pensions (Supen), the National Women’s Institute (Inamu) and the Ombudsman’s Office, which reviewed 1,248 initiatives before narrowing them to 20. CCSS Executive President Mónica Taylor said in May that the reforms would require national consensus. Some measures could be adopted by the CCSS board, while others would need approval from the Legislative Assembly.
The debate comes as the CCSS faces pressure on several fronts, from overcrowded hospital emergency rooms to a board that went months without meeting earlier this year. The changes under discussion concern the IVM, not the foreign pensions that qualify retirees for Costa Rica’s pensionado residency, though the government has separately proposed a 15% tax on certain foreign income.
An updated actuarial valuation of the IVM, using data through December 2025, could be ready by the end of 2026 and is expected to inform the panel’s work. For anyone here contributing to Costa Rica’s social security system today, the outcome will shape how long they must work and how much they can expect to receive when they stop.
