“The payment of the last bonus of 55,000 pesos to retirees who earn the minimum is guaranteed,” they assured from Anses, but the maintenance of this income compensation policy so that salaries are never adjusted below inflation will depend on the will of the new president. The same does not happen with the Retirement Mobility Law, which must have parliamentary support. The government of Javier Milei seeks to “make changes to the pension system so that it is fair and sustainable”, what exactly does this mean and what are the possible modifications within the law?
From Anses they confirmed to this newspaper the fulfillment of the payment of the last bonus of 55,000 pesos, but the successive reinforcements In the order of the 60,000 pesos for January and February that Massa had promised to continue in office, they will now be defined by the new president. Thanks to this policy, “the minimum retirement will have increased by 167 percent between December 2023 and December 2022, being above the inflation of the period,” they stated from Anses.
On the contrary, the Retirement Mobility Law is covered in the National Constitution which establishes in its article 14 bis “retirements and mobile pensions”, meaning that assets cannot be frozen. The current mobility law can be modified from another law but not by decree: “a norm can only be modified or repealed by a norm of equal or greater hierarchy of a later date, let us clarify that a decree is the same as a law while Congress is in recess, but then it must be ratified by the bicameral commission,” warns a lawyer specializing in pension issues. Facundo Fernández Pastor.
The current mobility law grants four increases per year contemplating the sum of 50 percent of the quarterly increase in Anses collection and 50 percent for the salary variation in the same period. If collection and salaries decrease in a crisis scenario, then assets will barely be updated.
Something that cannot happen is “remove or lower the taxes that go to Anses, that should be done by Congress”says Fernández Pastor. In that sense, he clarifies that “for many years the social security system in Argentina has not been supported only by contributions and contributions, but with specifically assigned taxes and, if necessary, with transfers from the State.”
“When Mauricio Macri took over as president, the tax on Personal property It was a specific allocation to the social security of Anses but they removed that denomination and also decided to assign 0.25 percent of what was collected instead of the established 1.5: that was the so-called Historical Reparation,” the lawyer argues.
Javier Milei’s team headed by the future Executive Director of Anses, Osvaldo Giordanotalks about “making changes in the pension system so that it is fair and sustainable”. In this way they synthesize the idea that the system must be sustained only with contributions and contributions labor, which is increasingly difficult in Argentina and the world because contributions decrease with increasingly flexible work modalities. Employer contributions also tended to fall as part of the liberal policies to reduce labor costs, “at the time they were 36 percent but Cavallo lowered them sharply,” recalls Fernández Pastor.
An alternative “that has already occurred several times is to declare a ‘social security emergency’ or to affirm that the system is broken, as Cavallo did in the 1990s before creating the AFJP. This generates the expiration of the rights acquired within the previous system and retirees are treated as creditors of a bankruptcy: the calculation of their assets is modified as if it were insurance that takes into account the contributions made and the life expectations of the people. ”says the lawyer.
“The modernization of the labor market will allow many more jobs to be generated and in this context of increased productivity and higher real wages, the economically active population increases. Therefore, it allows you to put the pension system in cash. without touching the acquired rights“Milei said in an interview. The world he tells is a fantasy, but he adds that the problem was that “during several episodes of Kirchnerism they increased the number of beneficiaries without increasing the number of contributors and that generated a very strong imbalance,” seeking someone responsible for evils that are systemic.
From Cavallo to Macri
“Cavallo also repealed the special regimes, which do not only include the judiciary or the bishops who charge fortunes, but also the regimes for unhealthy work such as transportation, mining, or the glass industry and which allowed early retirement. At that time people went to court and their rights were preserved, but this doubtfully happens today with the justice we have,” says Fernández Pastor.
Meanwhile, another modification that Mauricio Macri proposed with the Historical Reparation Law was the “harmonization of provincial funds”, meaning that the regime for teachers or public employees that several provinces have would be equal to the benefits with Anses. “María Eugenia Vidal wanted to put it into practice in the province of Buenos Aires and could not due to the resistance of the unions, for example in the Banco Provincia pension fund. Other funds that did not reach harmonization but made adjustments, such as that of the future Executive Director of Anses who reduced the mobile 82 percent of Córdoba public employees to 70 percent,” adds the lawyer.
In the government platform of La Libertad Avanza there is also talk of eliminating moratorias and that the benefits acquired by them be frozen, which violates the National Constitution. “Second generation reforms” include returning to a capitalization system, raising the retirement age of women aged 60 to 65 and directly eliminate employer contributions.
