After the setback of the Omnibus Law and a summer with a zero legislative harvest, the Government is working on a bill to
change the formula for automatic updating of retirements
and pensions that the Alberto Fernández government established at the end of 2020. The The intention of President Javier Milei and the Minister of Economy Luis Caputo is to replace that mechanism - which is in force today - with one that
allows the State to save
on the most onerous bill that it has to pay every month: the enormous
financing of the deficit in the pension system.
.
The formula that Congress voted on at the urging of Fernández determines that retirements and pensions are updated based on the evolution of two indices: the collection of Anses and the salary increases of workers.
These increases, however,
are applied with a delay of four months
.
For example, since March, retirees and pensioners will receive an increase of 27.18%, which will reflect the variations in salaries and Anses collection between October and December 2023.
The great fear of the Government, and that is why it
wants the formula to be changed starting in April,
is what can happen starting in June, when it is time to increase retirees according to the salary and collection increases from the Anses for January, February and March.
All calculations indicate that, after the inflation of 25.5% in December, with one of 20.6% in January, another of 15% estimated for February and just a few points less in the March forecast, the combination of the index increase in salaries and pension collection can lead to an increase in retirements of between 40% and 50%.
This increase will have to be faced by public coffers
punished by the drop in revenue resulting from the recession
and a period of slowing inflation that the Government itself expects for that moment.
To avoid this situation, Caputo and Milei are studying a new formula that, starting in April, increases pensions following only the evolution of inflation.
The key to savings for the State - and the consequent damage for retirees - is that the Economy does not want to compensate the assets by recovering all the loss of purchasing power suffered in the summer:
the ruling party will only offer to increase retirements and pensions by 15%
before launching the new formula.
To put it another way: instead of the 40% or 50% increase that the current formula would yield, the Government wants to give only 15%.
La Libertad Avanza officials have already conveyed the general guidelines of the reform to several PRO legislators, but have not yet begun to seek the consensus they need outside of their closest allies for the law to be approved.
Today, with the President
engaged in daily fights with governors and the main leaders of the dialogue opposition
such as the UCR and the bloc of deputies of the We Make Federal Coalition, that consensus seems very far away.
A good part of these spaces, which were previously unified in Together for Change, agree that the current formula is bad because it harms retirees in times of growth and defunds the State in periods of economic decline.
For this reason, they prefer that the assets of retirees and pensioners be tied to inflation and are updated according to the index compiled monthly by INDEC.
The
divergences are in the “junction” period
between the validity of the new and the old formula.
Caputo intends that this connection will help him save his budget by starting the inflation update
from a time when pensions are low
, and radicals and federalists will try to start the new account from a higher level, in order to compensate for the loss of purchasing power. accumulated in the income of the passive sector in recent months.