Nicaragua's private sector to assume 1% increase in employer social security contributions

Friday, December 20, 2013

From January 1 next year the Nicaraguan private sector will assume a 1% increase in employers' contributions to state-run social security system INSS, said José Adán Aguerri, president of private enterprise association Cosep.

Negotiations with the government are still ongoing to define the rest of the administrative changes that will be applied to the social security system in 2014, said Aguerri.

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INSS is set to receive an extra 670mn córdobas (US$26.0mn) in employer contributions next year, 25% of which will come from the state as an employer, with the remainder coming from the private sector.

In October the government proposed a gradual increase of 3% to employers' social security contributions starting in 2014, as well as adjustments to the minimum pension in line with the average national salary, as opposed to the minimum wage.

According to the Nicaragua central bank (BCN), as of October the INSS had 677,000 registered clients, of which 160,000 were state employees.