Former employees of Petróleos de Venezuela S.A. affiliated with the Retirees’ Pension Fund of PDVSA have been fighting for a decade for the payment of a massive debt that the oil company owes them, which continues to remain unpaid. Some estimates suggest that the debt to retirees could exceed USD 2,200 million.
Over 40,000 PDVSA retirees are awaiting their pension fund payments, as mandated by the regulations requiring annual disbursement of their retirement benefits, yet this has not occurred.
These individuals are organized within the Association of PDVSA Retirees (APJ-PDV) and express their concern regarding the deprivation of their fund rights, which was established to invest in dollars and protect its purchasing power. However, this aim has not been realized, as payments have yet to be made, despite years of claims.
They express dissatisfaction with pension adjustments and bonuses, which they consider inadequate given the currency devaluation. They argue that a 2014 statute reform stripped them of ownership of their assets, granting arbitrary control to PDVSA over the distribution of profits.
Ongoing Scam
The Pension Fund of PDVSA retirees has been subject to scams for years, tied to the names of Francisco Illarramendi and Rafael Ramírez, following the embezzlement of USD 540 million that occurred between 2009 and 2011 through a pyramid scheme.
Corruption and chavista irresponsibility manifested itself from that point on, and Ramírez attempted to distance himself from the scandal by claiming that PDVSA has no authority over the management of retirees’ funds. This assertion was refuted by the Association of Retirees and Pensioners of PDVSA (AJIP), which pointed out that they have not been involved in managing their own money since 1993, nor have they received financial statements from the company.
A collusion between the APJ-PDV governing board, headed at the time by Eudomario Carruyo Rondón, PDVSA’s Finance Director, and Jesús Villanueva, Vice President and Chief Auditor of the company, misused the funds and stripped former workers of their rights.
Rafael Ramírez was accused by the Federation of Oil Workers for the theft of USD 5,000 million and for modifying the fund’s statutes, enabling expropriation of management by the retirees. They defended their actions by claiming the money was used to strengthen PDVSA, which is seen as an unacceptable excuse.
The Permanent Commission of Comptrollership of the National Assembly elected in 2015 held Rafael Ramírez responsible for irregularities in PDVSA contracts totaling USD 11,000 million.
Demands from Workers
The retirees demand payment of what rightfully belongs to them, based on the fund’s high performance, estimated in the billions of dollars. The group urges focus on legal and financial aspects, recommending an audit of APJ-PDV to ensure transparency and access to accounting information.
Additionally, during this entire time, Venezuelan oil industry retirees have had to struggle for pension adjustments. Nevertheless, PDVSA’s responses and offers have always been negative or insufficient.
The “Seizure” of Assets: 2014 Statutory Reform
Irma Sosa Brandt, a chemical engineer, lawyer, former HR manager of Lagoven, and member of the PDVSA Retirees Group in Caracas, has been demanding for years the payment of benefits from their assets. She states that PDVSA’s “seizure” of these assets and profits constitutes an expropriation of a significant portion of the returns generated from the former workers’ money.
This contravenes the original statutes and initial investment expectations, which were irregularly reformed under the 2014 statutory reform, forming the central point of the claims from former oil workers.
This reform of the APJ-PDV statutes was formalized in November 2014 and was deemed an arbitrary transfer of ownership since it conferred fund management to PDVSA.
The original wording of Article 33 of the statutes specified that the Assembly of former workers would decide the purpose of interest and benefits for the “beneficiaries,” including pension adjustments and bonuses.
The wording adopted in the 2014 reform states that the distribution of profits—when there are any—will be conducted under “principles of social justice, solidarity, and equality, essential for moving forward with the current restructuring process of the national income distribution.” This, according to the retirees, allows for arbitrary distribution by the Management Board of APJ-PDV.
This resulted in the expropriation of salaries/benefits for 28,000 elderly individuals who confidently deposited their assets in APJ-PDV to be invested in order to achieve returns that could offset the loss of purchasing power of their pensions.
Origin and Purpose of the APJ-PDV Fund
The civil association APJ-PDV was established in 1993 by former coworkers to “invest our money in dollars for the benefit of retirees.” In this way, they hoped to compensate for the loss of purchasing power of their pensions.
The latest audited financial statement—available to the group—indicates that the fund exceeded “two billion dollars.” In the years 2014, 2015, and 2016, the fund produced a “high yield due to currency variation.”
Since PDVSA assumed fund management following the statutory reform, APJ-PDV affiliates have stopped receiving information about their assets and corresponding benefit payments.
Former oil workers consider this situation unfair on PDVSA’s part, as it fails to fulfill its commitments to retirees who “built the nationalized oil and petrochemical industry.” Therefore, they demand “the distribution of all obtained returns.”