With wages plummeting, the regime wants Cubans to save money to ‘supplement’ their retirement

Although wages in Cuba are not enough to eat, the authorities want the population to save to “supplement” the meager pension that awaits them when they retire. To this end, the Bank of Credit and Commerce (BANDEC) recalled “the option of forming supplementary retirement funds, designed for individuals who wish to strengthen their financial situation for retirement,” in a note published on Saturday by the official website Cubadebate. Workers who wish to and are able to use this service must apply for it through an institutional process via their workplace. The employer will be responsible for contracting it at the bank branch where their payment center is located. The person does not have to make any initial payment to open the fund. They only have to establish a monthly installment, the minimum value of which is 100 pesos. During the first five years, they may increase the amount of the installment. What they cannot do is reduce it, according to Cubadebate. “It is a requirement to maintain the minimum balance set in the contract,” the official website emphasized. The fund offers an annual interest rate of 7%, which the worker can only benefit from if they fully comply with the agreed ten-year term. If you request to close the account earlier, you will not receive the interest accrued under that rate. For early withdrawals, the interest will be 4% “for each full year elapsed.” For periods of less than one year, the interest rate will be 2%. The information was published by Cubadebate three days after the Central Bank of Cuba (BCC) announced a third official exchange rate of 410 pesos per dollar, which reduced the average monthly salary in the business and budgeted (state) system (6,685.3 pesos, according to the state-run National Office of Statistics and Information) to US$16.3. According to the ONEI, the average salary in the business sector is 7,589.6 pesos, which since December 18 is equivalent to US$18.5. Meanwhile, the salary in the budgeted sector (5,728 pesos) represents US$13.9. Cubans who earn the minimum wage of 2,100 pesos earn US$5.13 per month, according to the official rate implemented by Havana. Will they be able to do without 100 pesos each month to “strengthen” the financial situation that awaits them after retirement? In early December, Cuban professor Javier Pérez Capdevila estimated the average cost of the reference basket of goods and services at 50,157 pesos per person per month, including only 37,590 pesos for food. This is based on his experience living in Guantánamo, which is not the most expensive region on the island. What Cuban state workers will be able to afford to save at least 100 pesos each month for retirement? The “option” offered by BANDEC, while reflecting a new government mechanism to extract money from Cubans, constitutes a tacit acknowledgment that Cubans receive meager pensions after decades of work. In mid-July, Prime Minister Manuel Marrero announced an increase in retirement, disability, and death pensions, which took effect in September. This benefited 88% of Cuba's pensioners, who now receive 4,000 pesos per month. That amount, which is not even enough to eat, as Capdevilla's study shows, makes these Cubans fortunate compared to other pensioners in the country who receive only 3,000 pesos.