Social security marks the end of the Dominican Hotel Fund

The Dominican Republic’s Hotel Fund –an entity devoted to providing employees in hotels and restaurants with monetary assistance- is one of the many structures doomed to go down the drain as soon as the country’s new social security scheme goes into effect.

From being an institution that used to collect no less than 3 million Dominican pesos every month out of a workers and employers fund, the Hotel Fund is now only amassing an average 300,000 pesos, the fund chairman Pedro Peña Faña revealed.

In virtue of Act 250-84 that set the Hotel Fund going, this entity has been in charge of managing pensions and retirement plans for employees in the leisure industry. Now the fund will be virtually overridden by Act 87-01 on Social Security.

The Fund of Pensions, Retirement Plans and Social Services to Hotel and Restaurant Workers is a self-managing, non-profitable organization that came into being with the enactment of Act 250-84 in order to guarantee social security coverage to industry employees.

The fund gathers one percent of every establishment’s payroll plus an additional one percent purveyed from the salaries of industry workers all across the Dominican Republic.

Around 40 percent of the collected monies are funneled into pension and retirement plans, while the remaining 60 percent goes into social services.

The institution used to dole out pensions for the handicapped, retirement plans, complementary assistance to deceased employees’ relatives, school tuition for workers’ children and health care services.

One of the fund’s top benefits was no doubt the health care services for it used to cover not only employees, but also their wives and children. The system disappeared the moment the Social Security began a streamlining process and authorities determined it would be better off to stop keeping industry personnel in clinics and do some cost cutting.