Paraguay
Comptroller Warns of Low Legal Coverage for IPS Funds Deposited in Banks
The CGR said the guarantee provided by law for bank deposits is far below the volume of resources managed by the social security agency. It also questioned the out-of-court agreement that led to the collection of fees by a former IPS legal adviser.
The Comptroller General of the Republic warned that the Social Security Institute does not have specific procedures to act in the event of a bank failure or insolvency and that, according to ABC Color, it refers to what is established in Law No. 2334/03 on Deposit Guarantee.
According to the CGR’s Director of Forensic Audit, Leandro Villalba, that regulation sets coverage of up to 75 minimum wages, currently equivalent to G. 228,300,000. As he explained to the outlet, that scheme was not designed for amounts like those held by the IPS, which has about G. 3 trillion, some US$ 1,000 million, placed in different financial institutions.
Villalba indicated that Article 20 of the law provides priority for pension funds in the event of a bank failure. However, he clarified that this preference does not imply total guarantee over IPS resources: first, the minimum amount protected per depositor would be covered and then, if funds were available, the repayment mechanism provided for by law would be followed.
The official also stressed that, once those legal mechanisms are activated, the situation would fall under the responsibility of the Central Bank of Paraguay and no longer the IPS. According to ABC Color, the Comptroller’s Office said the observation is not intended to cause alarm, although it does seek to warn about the handling of a significant sum of public money.
In its report, the CGR also noted the concentration of IPS placements. At the end of 2025, four banks accounted for 70% of those resources: Sudameris with 21.4%; Ueno Bank with 19%; Banco Nacional de Fomento with 14.5%; and Continental with 14.4%. In that context, it recommended strengthening monitoring mechanisms and the assessment of counterparty risk and investment concentration.
On the other hand, Villalba objected to the procedure by which former IPS legal adviser José González Maldonado collected G. 412,500,000 in professional fees through an out-of-court agreement, ABC Color reported. According to the opinion sent to the Prosecutor’s Office, there were observations regarding conflict of interest, lack of judicial regulation of fees, and the absence of an actuarial analysis to safeguard pension funds.
The case is related to a debt for employer-employee contributions of a private company accumulated between 2003 and 2018. Still according to ABC Color, on July 29, 2024 the firm offered to settle the debt and the fees, and 24 hours later the IPS Board of Directors approved the agreement, promoted by the Legal Advisory Office headed by González Maldonado.
The CGR also pointed out as a critical issue that, in Minute No. 054/2024, the then legal adviser admitted having acted with the approval of President Santiago Peña and presidential adviser Juan José Galeano to provide political and legal backing to the understanding, which included a debt write-off. The Comptroller’s Office maintained that a payment of that kind should have been regulated by a judge and not resolved internally.
In addition, Villalba questioned that González Maldonado signed the legal opinion that served as the basis for authorizing the agreement that later led to his own payment. The investigation is in the hands of prosecutor Cristian Benítez and, according to ABC Color, the CGR ratified its report and asked for the inquiries to be deepened. It also indicated that there is no evidence of payments to other lawyers who took part in the litigation over the years, beyond the invoice submitted by the former legal director.
Sources
About this note. Written by El Notero with the assistance of artificial intelligence, based on what was published by the cited outlet. El Notero did not conduct its own reporting on this fact.
