With the increase in pensions and pensions for the period March-May – which is estimated to be of the order of 17/18% – there will be a new bonus for those who receive lower salaries in those months. Otherwise, these pensioners and retirees would earn less than in previous months, the government has admitted.
The increase in mobility for March-May will be announced next Friday 10 when INDEC will report the wage index for December, the variable that is missing to finish calculating the percentage increase in wages. But it is estimated that it could be around 17-18%.
The minimum retirement is today $50,124 (gross) plus a $10,000 bonus. In total $60,124. With 18% mobility, the minimum retirement would go to $59,146. Thus, without bonuses, the retiree or minimum wage retiree would earn nominally less than in previous months, with a sharp further deterioration relative to inflation.
As a result, a bonus of at least $12,000 a month would be required to bring total income to $71,146, which would be 18% more than what was received in the prior quarter.
If it is a “one-off” or “extraordinary” payment, due to the inflationary surge these bonds have become permanent and in ascending values. And they cannot fail to repeat themselves because the increases for mobility would be canceled if those retirees lose the collection of bonuses.
After the loss of 19.5% of retirement assets between September 2017 and November 2019, the pension bonus for lower wage earners made its debut under the current government “for the only time” in December 2019.
Thus, bonuses of $5,000 were given in December 2019 and January 2020 for minimum retirements, and another $3,000 in April of that year.
Bonuses of $1,500 were awarded in April and May 2021. A $5,000 bonus was awarded in August and a bonus of up to $8,000 in December 2021.
In the IMF Staff Report, which accompanied the agreement with Argentina, it was emphasized that the pension system pays very high salaries in relation to salaries and that “discretionary increases in pensions and pensions should be avoided”, in connection with special awards.
However, with the audits approved and no new objections known from the international organization, due to skyrocketing inflation, in 2022, bonuses have become more frequent. In April ($6,000) & May ($12,000), August (up to $5,000), September, October & November ($4,000/7,000), December, January & February 2023 (up from $7,000/10,000).
This happens because the mobility formula – which combines the salary with the collection of taxes that goes to the Social Security – does not have a guarantee clause or an automatic compensation against inflation. And the bonuses are received only by pensioners and pensioners with lower salaries, flattening the income pyramid of the system.
Also, by not being credited, bonuses compensate a sector of retirees for a portion of the price increase in the month or months in which they are collected, but in the following month or months, the retiree’s total income returns to the pre-credit level. bonus and requires the award of new bonuses that become more frequent.
On the other hand, bonuses are not taken into account for future salary increases. In this way, the pension loss continues “for life”.
Meanwhile, those who do not collect the bonus – more than 2 million pensioners and retirees – have no compensation and absorb, with a decline in real terms of their assets, the total loss due to inflation.
Without the bonuses, the mobility formula in 2022 yielded 72.5% against annual inflation of 94.8%. A loss of 11.5%.
Source: Clarin
