By Francisco Rinaldi / firstname.lastname@example.org
The proposal to update pension assets sparked controversy among those who claim that the Government turned to the right in its economic policy when starting a spending adjustment process and those who defend the sustainability of a pension system in serious trouble.
On the side of the Government, they deny such a change and assure that the new formula that adjusts, in equal parts, based on the evolution of wages and social security resources (income from the Anses), is “substantially the same as that sanctioned in 2008 and that resulted in a sustained improvement in the purchasing power of retirees and retirees until 2015 ”.
They also add that the formula seeks to avoid underfunding the system, since “including collection in the formula allows growth to be shared and, at the same time, to take care of fiscal sustainability.”
“The cap on annual increases is recovered, which may not exceed the growth of total Anses resources (multiplied by 1.03). This cap was in force between 2009 and 2017 and is key to guaranteeing the sustainability of the social security system, preventing expenses from growing systematically more than resources and the pension deficit growing uncontrollably (as happened between 2016 and 2019). This condition of sustainability had been eliminated with the reform of 2017 ”, they limit from the Executive.
In effect, the data indicate that with the 2008 formula (law 26,417), assets rose above the Consumer Price Index (CPI) until 2013, to fall between that year and 2014, falling back sharply during the last two years of its validity (2015 and 2017), since in December of that year it was modified again by the administration of Mauricio Macri (see graph).
“I am in favor of pension assets always evolving according to ‘healthy’ indices of economic activity. For this reason, although the proposed indexes are virtuous, in a country like ours, where the inflationary phenomenon is chronic, to forget it when proposing a rule to adjust passive assets is to deny a fatal reality, ”warns the pension planner from Bahia Alfredo Bernabei.
For the economist Rafael Rofman “adjusting pensions for collection is a bad idea. Almost everyone does it for inflation, wages, or a combination of both, for good reasons for that. The objective of mobility is to protect the purchasing power of profits, giving them predictability ”.
For the benchmark on Social Security issues of the Center for the Implementation of Public Policies for Equity and Growth (CIPPEC), since the collection is very volatile (it rises in times of fat cows, decreases in times of thin), the assets of liabilities will be adversely affected.
“It seems reasonable to me that assets should not grow above what Anses collects. I understand the position of those who think otherwise, but you cannot promise what you cannot pay, ”explained Jorge Colina, an economist from the Institute for Argentine Social Development (Idesa).
An incomplete debate
Beyond the relevance or not of the proposed adjustment formula, the pension system suffers from a clear problem: its financing. It is that the personal contributions of registered workers and the contributions of employers constitute the bulk of the income of the Argentine pension system.
And in that sense, the maintenance rate, which relates the number of contributors to the system with respect to the amount of benefits paid, went from 1.72 to 1.94 between 2009 and 2014, to describe a downward trajectory from then on, As a result of the extension of the pension moratorium, which is produced from Law No. 26,970.
More: in 2005, the State paid more than 3 million pensions and pensions, but ten years later it began to pay more than double.
In the future, with an unregistered employment level averaging 30% nationwide, the number of contributors is seriously compromised, so that economic growth and the generation of registered jobs will be key to mitigating the deterioration.
Conclusion: the sustainability of the system seems to be more tied to the growth of registered employment (contributions and contributions) than to the formula used for the adjustment of assets and, indirectly, to investment and economic expansion.
“What possibility does the retiree, the retired person, who has already contributed, have of intervening in serious employment policies that contribute to improving the practical result of the formula?” Bernabei wondered,
For Colina, the moratoriums that increase spending not supported with contributions should be deactivated, eliminating the double benefits that some retirees charge.
“There are liabilities that add pension and retirement, for example. The ideal would be for the beneficiary to choose one or the other, “he said.