The Executive Branch signed Bill 163 into law on March 18, 2025, making it the most extensive structural reform of the Social Security Fund (CSS) since Law 51 of 2005. The text, prepared by the Ministry of Health under the direction of Minister Fernando Boyd Galindo and authorized by Cabinet Resolution No. 104 of November 6, 2024, was submitted to the National Assembly on the same date. The Labor, Health and Social Development Commission approved it in First Debate on February 7, 2025, in Second Debate on March 10, and in Third Debate on March 13, 2025, before it was forwarded to the Executive on March 14.

The reform's financial framework rests on three pillars. First, a three-percentage-point increase in employer contributions — both public and private — with no change to employee contributions. Second, an additional state contribution of approximately 1.185 billion balboas annually, drawn from the General State Budget, to guarantee the sustainability of the Unified Solidarity Fund. Third, a more flexible regulation of reserve management aimed at increasing returns. The explanatory memorandum warns that, without reform, by 2029 the system would only be able to pay fewer than half of current pensions.

On the benefits side, the law introduces the Solidarity Guaranteed Pension as the minimum retirement value for any insured person under the Mixed Subsystem who reaches the reference age for the Solidarity Component. Article 23 of the law — under the terminology of the glossary in Article 1 — establishes that no pensioner in that subsystem will receive less than 40% of the corresponding reference salary. The law also creates a universal non-contributory Basic Pension, initially set at 144 balboas per month for persons over 65 who have not accumulated sufficient CSS contributions, replacing the previous program of 120 balboas. Pensions will be periodically adjusted in line with the cost of living.

The reform raises the retirement age by three years for both men and women equally, justifying the adjustment on the grounds that the life expectancy of Panama's population has increased by six years over recent decades. However, contributors who are seven years or fewer from retirement are expressly excluded from the new parameters: they continue under the conditions currently in force under Law 51 of 2005. Those who are more than seven years from retirement enter the new regime of the reformed Mixed Subsystem, based on solidarity capitalization with a personal savings account.

The actuarial impact on CSS reserves constitutes the most critical variable to monitor during the post-enactment period. The 526-page text amends articles from the glossary (Article 1) through provisions on enforcement and contributions, introducing concepts such as Solidarity Capitalization, Solidarity Benefit Pension, and Composite System. The explicit non-privatization guarantee for the institution — enshrined in the amended Article 2 — is a direct response to the context of the 2023 social protests. Legislative tracking records the law as having reached its final stage as of March 18, 2025.