Paraguay’s New President Prioritizes Pension Fund Recovery After Ueno Bank Collapse

Paraguay’s President Pedro Alliana announced on Tuesday that recovering pension funds held at Ueno Bank will be a top priority for his administration. The government’s intervention in the bank has jeopardized roughly $800 million (≈€716 million) belonging to public entities, including five pension schemes, sparking a political crisis that culminated in the ouster of former President Santiago Peña.

Among the affected entities is the Social Security Institute (IPS), which oversees pensions and part of the national health system. The uncertainty surrounding the funds’ recovery has led to mounting concern among workers and retirees.

Alliana, who assumed the presidency last Friday, has vowed to safeguard citizens’ savings and expedite compensation payments following the banking collapse.

Near‑95% of Depositors Have Already Received Compensation

He stated that approximately 1.74 million depositors have already received payments totaling $330 million via the Deposit Guarantee Fund, and the government intends to finalize the remaining reimbursements by Wednesday, 11 November, under the emergency legislation enacted by Congress.

Nevertheless, the disbursements do not assure full recovery of all savings. The guarantee scheme insures up to roughly $38,600 (≈€34,575) per depositor, whereas initial advances are capped at about $20,000.

For many affected individuals, the return of funds marks the first relief after days of anxiety. “At last they transferred the money I was missing,” said Rosario, a 45‑year‑old client who requested anonymity, speaking to AFP.

Ueno Bank Crisis Triggers Political Upheaval and President’s Removal

The government’s intervention in Ueno Bank ignited widespread demonstrations calling for deposit returns and the resignation of then President Santiago Peña, who had ties to the bank.

Intensifying political and social pressure led to his removal following an impeachment trial in the Senate. Vice President Pedro Alliana assumed leadership and expedited compensation disbursements via the guarantee fund.

The turmoil also reverberated through the job market. Paraguayan Labor Minister Mónica Recalde reported that approximately 7,000 employees have lost their positions at firms associated with the bank across Paraguay, Mexico, Nicaragua, Argentina and Panama.

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