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What weight do the retirement regimes have that the Government says it will target

The Government decided that, in order to “continue to strengthen the pension system” (according to the letter of the agreement with the IMF), it will work on a study “that describes the options and recommendations to strengthen the equity and long-term sustainability of our pension system, focused on certain special retirement systems reached by law 27,546″. And it is clarified that this rule refers to the retirement system for magistrates and officials of the Judiciary and the Public Ministry of the Nation (the text does not mention it, but that law is also applicable to foreign service officials at the time of their retirement ).There are two aspects for which it is striking that in order to give sustainability to the pension system, this law is targeted in particular: one is that the regimes covered by it have about 8000 monthly benefits upon payment, According to official data, while the general system has 6.7 million benefits (not counting the non-contributory), and the expenditure they represent is equivalent to 0.08% of GDP, according to estimates by the economist Rafael Rofman, director of Social Protection of Cippec. The other point is that that law was promoted by this government and approved, in fact, under the current management, at the beginning of 2020. In that reform two years ago the pension contribution was raised of those reached by these regimes (it was 18% of the remuneration, while in the general system it is 11% and a maximum salary is in force, now of $357,166.98, to apply the percentage); the initial credit formula was changed to moderate the amounts; the retirement age for women was raised -in the case of the Judicial Power system-, from 60 to 65 years, and The requirements for access have been modified. This last point is one of the ones that caused the most controversy and litigation has already been initiated. Analysts of pension issues consider that, after this reform (whose effects, as occurs with pension changes, will be seen as time goes by), practically there is no room to make changes that have a significant fiscal impact. In the case of the Judicial Power regime, in December 2021 there were 7,252 benefits, according to data from the Social Security Secretariat, for an average amount of $385,181; in the system of foreign service officials, there are 693 cases and the average income is $445,508. One system that has not changed (and is not expected to change) is that of lifetime allowances for former presidents and former vice presidents of the Nation. These benefits, considered privileged, do not require that those who collect them have a certain age or a minimum amount of contributions made in their working lives. They are those of the regime by which the vice president Cristina Kirchner receives two benefits of high amounts at the same time, one as a former president and the other as the widow of a former president. According to official statistics published by the Social Security Secretariat, Anses administers seven “special” pension regimes: in addition to the two already mentioned, there are those for teachers (163,883 benefits), university teachers (8539), researchers and scientists (8541), workers at the Río Turbio Coal Deposits (665) and workers of the union of Light and Force (36,998). Outside these systems and also the general one, there are others that are considered “differential”, linked to “premature aging” which, it is estimated, causes the development of certain tasks. Last week, for example, the regulatory decree for a new retirement scheme was approved for winery employees, who will retire at 57 years of age and for whom there will be higher employer contributions. the negotiations with the Fund (which the Government had denied), The Minister of Economy, Martín Guzmán, said that nothing would be modified in regimes such as those for teachers, and that the analysis would be limited to those included in Law 27,546. That mention, which was not in the drafts, it was now included in the text of the agreement that was sent to Congress.In the general system, meanwhile, there are several issues that represent challenges. Two thirds of the pensions that are currently being paid, for example, were obtained via moratoriums, because their holders did not have the 30 years of contributions required by the system to access the benefit. That is a reflection of serious and widespread labor market problems and, at the same time, as the moratorium plan was implemented without forecasting costs and sources of financing, affects the sustainability of future payments. Another important aspect is that for more than a decade the number of formal wage earners in private companies does not grow (The number is around 6 million, according to the records of the Argentine Integrated Social Security System. It does increase, however, the number of monotributistas contributors to social security (today there are around 1.8 million), who contribute amounts that are considered low in relation both to what the State promises to pay them in the future, and to the level of contributions made by other workers.

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