Gov Accountability

Costa Rica cuts its luxury pension scheme

Costa rica

The Costa Rican Legislature recently approved a bill that will cut luxury pensions to over 4,000 retirees. The bill takes aim at a group of pensioners dubbed “Ticos Con Coronas,” (Costa Ricans with Crowns) who receive an average monthly pension of US$4,495, with some receiving more than US$24,000 per month. Instituto de Desarrollo Empresarial y Accion Social (IDEAS), an Atlas Network partner in Costa Rica, has been leading the charge to roll back these excessive luxury pensions. The IDEAS team also successfully advocated for a series of reforms exploited by government retirees to artificially inflate their pension.

To change public policy, IDEAS started by attempting to change public opinion. A massive public education initiative was disseminated throughout the country through op-eds, press releases, and news outlets, highlighting the economic ramifications as well as the immorality of some of these luxury pensions. “Luxury pensions are the result of ‘inequalities by design,’” explained President of IDEAS Luis Loría.

The reach that IDEAS was able to achieve was unprecedented, with tens of thousands of Costa Ricans signing a petition on calling for an end to these pensions. While the World Bank had been advocating for pension reform for decades with no success, IDEAS made it a hot topic in less than 2 years. The bill was approved unanimously by the Legislature in November and was signed into law on December 5, 2019. Loría is optimistic that these changes will help shape the economic landscape of his country. “This is an important step towards a more fiscally sound policy in Costa Rica.”

Atlas Network has been a longtime supporter of IDEAS and supported their “Ticos Con Coronas” project over the past year. “This success would not have been possible without the support of Atlas Network and its donors,” continued Loría. “In addition to financial support, the IDEAS team has benefited from Atlas Network training, mentoring, and networking opportunities that allowed us to design and implement a successful and high impact strategy aimed at eliminating these unfair pensions.”