Montepíos

Montepíos, Spanish and Spanish American pension bureaus and pensions for public officials, sometimes referred to as montes. In the second half of the eighteenth century in an effort to provide regular pensions for public servants, Charles III created montepíos. Prior to the establishment of these institutions, the crown had granted pensions to public officials or to the military and their survivors primarily on an ad hoc basis, but in the early 1760s it initiated a systematic new plan to provide retirement income for those in the military (montepío militar) and high bureaucratic positions (montepío de ministros). A short time later the plan was extended to lesser state officials (montepío de oficinas). A board consisting of a director and four members chosen from the councils of Castile, Indies, Orders, and Hacienda administered the pension fund and certified individuals eligible for stipends.

Montepíos were introduced into the Indies virtually at the same time as in Spain. In Cuba, Santo Domingo, and Puerto Rico, royal treasury officials began pension deductions from military salaries in the mid-1760s at the same time they were put into effect in New Granada. Far to the south in Buenos Aires, engineers—probably from Spain—working on fortifications in the Río de la Plata region paid into a pension fund (montepío de ingenieros) in 1764; soon thereafter public officials and the military began doing the same. In Mexico in the mid-1770s the authorities put in place a military montepío first, and then almost immediately thereafter established montepíos for government bureaucrats. In Lima, however, the state pension program took hold more slowly. The first salary deductions for the montepío militar appeared in the Lima account ledgers in 1780 and for officials in 1787. Thus, expansion of the pension system varied from region to region, but between the early 1760s and 1780, montepíos had been set up virtually everywhere in the empire for a whole host of public servants: major and minor bureaucrats; those serving in the army and navy; naval, army, and civilian surgeons performing public service; arsenal personnel; and ship pilots in Spanish American ports.

Montepíos were aimed at providing pensions equal to one-quarter of an official's salary. Salary deductions were based on the wages earned by the government official. Unfortunately, in setting deduction rates and the size of a retiree's pension, montepío directors had no actuary to predict life expectancy for the pensioner, his widow, or surviving children, nor could they know if a widow would remarry. Thus, the montepíos became a financial nightmare. Funds built up initially when the pension plans were put into effect quickly ran out, particularly in those montepíos with a small base of contributors, such as the montepío de ministros. When funds were exhausted, pension administrators either had to lower or suspend payment of stipends or borrow money to meet their obligations. For these reasons, by the time of the Wars of Independence, the pension program for government servants was floundering virtually everywhere in the Indies. On the positive side, despite these failures, establishment of the montepíos demonstrated the new paternalistic commitment of the Spanish state to a seemingly rational system for providing old-age support for those who had performed faithfully in the public service.

BIBLIOGRAPHY

Dewitt S. Chandler, Social Assistance and Bureaucratic Politics: The Montepíos of Colonial Mexico, 1767–1821 (1991).

Additional Bibliography

Acevedo, Edberto Oscar. Funcionamiento y quiebra del sistema virreinal: Investigaciones. Buenos Aires: Ciudad Argentina, 2004.

Marichal, Carlos, Daniela Marino, and Ana Lidia García. De colonia a nación: Impuestos y política en México, 1750–1860. México: El Colegio de México, Centro de Estudios Históricos, 2001.

Sánchez Santiró, Ernest, Luis Jáuregui, and Antonio Ibarra. Finanzas y política en el mundo iberoamericano: Del antiguo régimen a las naciones independientes, 1754–1850. México, D.F.: Universidad Autónoma de México, Facultad de Economía: Instituto de Investigaciones Mora, 2001.

                                John Jay TePaske