Pension
All employers in Ecuador must register their employees with the Ecuadorian Institute of Social Security (IESS), which provides pension benefits. There is no fixed age for retirement. The retirement pension is granted from the month a member ceases employment and fulfills the following requirements:
Age | Years of contributions |
Any age | 40 or more |
60 years or older | 30 or more |
65 years or older | 15 or more |
70 years or older | 10 or more |
Retirement pension is the average of 5 best years of income on which contributions are paid. This average is multiplied by the annual coefficient corresponding to the number of years of contributions. The pension coefficient increases by 0.0125 for each additional contribution year beyond 40 years.
In addition to their regular pension, retirees receive an additional month's pension as a Christmas bonus in December. A fourteenth pension is paid in September of each year for pensioners from the Sierra and Amazon regions and in April for those of the coast and insular region. The amount is equal to a unified minimum wage in force in the year of payment.
Dependents/Survivors Benefits
The Ecuadorian Institute of Social Security (IESS) provides survivors' pension to widowed spouses, cohabitants, children under 18 years of age or disabled, and in absence of these, to financially dependent parents of a deceased member. The members must have been recipient of old age or invalidity pension or active member with at least 60 contributions.
The surviving spouse of legal cohabitant receives 60% of the pension the deceased was entitled to. If there are children, they receive the remaining 40% of the pension divided proportionally. In the absence of these, parents of the deceased receive 40% of the pension the deceased was entitled to. The right to pension ceases upon death, remarriage or reaching 18 years of age.
In case of death due to work injury or occupational disease within 180 days of the accident or beginning of disease, employers are liable to pay survivors pension to the heir of the deceased. This pension is paid as 60% of the pension the deceased was entitled to. If there are children, they receive the remaining 40% of the pension divided proportionally. In the absence of these, parents of the deceased receive 40% of the pension the deceased was entitled to.
Invalidity Benefits
The Ecuadorian Institute of Social Security (IESS) provides disability pension to insured members who are permanently incapable of seeking temporary or definitive job proportionate to their ability, strength and training due to non-occupational reasons. To be eligible for this benefit, insured member must have paid at least 60 monthly contributions of which six must be immediately prior to disability. Unemployed insured members can avail disability benefit if their disability occurs within 2 years of being unemployed, provided they have paid a minimum of 120 contributions.
Disability pension is granted after medical approval from IESS qualifying physician and rehabilitation efforts. After this, a temporary subsidy is granted for up to a year. If the condition does not improve after that, an economic analyst proceeds to calculate the benefit and pension for life. Pension is calculated as average of 5 best years of income on which contributions are paid. This average is multiplied by the annual coefficient corresponding to the number of years of contributions.
In case of disability due to work injury or occupational illness, benefits are paid by employers. The employer will be obliged to pay for medical treatment and supply and renew normal use of prosthetic and orthopedic devices, the use of which is deemed necessary due to the injury suffered by the victim.