How pensions evolved during Alberto Fernández’s administration

Aug 09, 2022 18:55 pm | Reading time: 2 minutes
Aug 09, 2022 18:55 pm
| Reading time: 2 minutes

The national government will report in the next few hours the update of the retirement mobility index, which will define andl increase in pensions and pensions for the month of September. In addition, the Nation’s Minister of Economy, Sergio Massa, announced at a press conference that it will also be granted “a booster to help retirees overcome the damage caused by inflation”.

How pensions evolved in the last year and during the administration of Alberto Fernández (Frente de Todos) and what differences exist between the current mobility formula and the one in force during the government of Mauricio Macri (Cambiemos). We tell you in this note.

Loss of purchasing power of pensions

As far as Fernández’s management is concerned, the minimum pension fell by 4.6% in real terms (that is, incorporating the effect of inflation): in December 2019 the credit was $14,067, while last June (current amount) it reached $37,525.

While, in the year-on-year comparison, the minimum credit of last June fell 0.7% real compared to the same month last year.

During his tenure, The Front of All granted bonuses to supplement the income of retirees. Last April, the payment of $6,000 was approved for those retirees who did not exceed the minimum amount, while in May a second benefit of $12,000 was delivered, in this case, for all beneficiaries with earnings below 2 minimum pensions.

However, as explained in this note Eugenio Semino, defender of the Third Age of the Ombudsman of the City of Buenos Aires, bonds “should not be considered [al calcular el poder adquisitivo] because they are not remunerative, they do not accumulate in the following months and they do not reach all the beneficiaries of the system”.

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On the other hand, the average retirement fell 8.8% relative to December 2019last increase granted by the management of Cambiemos.

different formulas

The retirement mobility system has the calculation by which the increase in the assets of passive workers is automatically definedpensioners and beneficiaries of the Universal Child Allowance (AUH).

In December 2019, Fernández suspended the mobility formula approved by the Cambiemos government in 2017 and, in this context, during 2020 the update of assets was done on a discretionary basis.

Finally, in December 2020 the current mobility index was approvedwhich began to be used as of the March 2021 assets update.

What is the difference between both formulas?

The mobility index promoted by the Macri administration in 2017 it provided for pensions to be updated quarterly, according to a formula that contemplated 70% of the increase in inflation for the quarter and 30% of the increase in private salaries for that same period. The calculation was made with a difference of 6 months, that is, it was based on how these variables had evolved 2 quarters earlier.

Instead, the current formula arises from the sum of 50% of the quarterly increase in the collection of the ANSES and 50% for the salary variation of the same period. In the latter case, data from INDEC or the Ministry of Labor (RIPTE) are used, depending on which was the highest. The calculation is made on the previous quarter.

In the comparison of both formulas it can be seen that in 2020, during the validity of the Social Solidarity Law and the increases by decree, pensions increased 5% less than they would have done with the Cambiemos formula.

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However, the new retirement modality currently is superior to the formula used during the government of Cambiemos: since its first application it has been granted an 84.1% increase, while with the old calculation the increase for the same period would be 67.3%.

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