The Minister of Economy, Sergio Massaand the head of ANSeS, Fernanda Ravettaannounced this Friday FrFirst mobility increase of the year for retirements, pensions and benefits, and a $15,000 booster for retirees who pick up the floor. So now the minimum retirement becomes $73,665.
“It is appropriate to apply the increase in mobility for pensioners, retirees and recipients of family allowances and other benefits for almost 17 million people who are bound by the pension mobility formula”, remarked Massa.
“We are following a recovery path that we want to consolidate, we aspire to have 11 recovery points by the end of March”, added the Economy Minister.
Referring to the minimum pension, Massa stressed that “from March to March it has an incidence of more than 125% on the value of pensions and pensions. Also, for this quarter, it has an additional effort from the National Treasury of more than $200 billion in a reinforcing bond that seeks to accompany the retirement formula that improves small-scale retirements.
In addition to the 17.04% increase given by the formula, Raverta took care of providing the details of the bonus: “There will be a strengthening for retirees of the $15,000 minimum in the next three months, $15K per month until next mobility“.
“This bonus will also incorporate those retirees who have up to two minimums, in a degressive manner. Those with up to two minimum retirements will have a $5k boost“, Raverta remarked, assuring that he was referring to 6,100,000 pensioners, 84% of retirees in Argentina.
The impact of inflation on retirement
Without the bonuses, the mobility formula in 2022 yielded 72.5% against annual inflation of 94.8%. A loss of 11.5%. With a rise of 17% in March, in 12 months the increase would rise to 79.7% and we will have to wait for the January-March inflation data to calculate the level of the year-on-year loss.
The minimum retirement today is $50,124 (gross) plus a $10,000 bonus. In total $60,124. With 17% mobility, the minimum retirement would be $58,645. 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.
The mobility formula – which combines an increase in wages and an increase in the collection of taxes that goes to the Social Security, per beneficiary – does not include guarantee clauses or 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, bonds have not been integrated so far as they have compensated a sector of retirees for a portion of the price increase in the month or months in which they are collected. But the following month or months, the retiree’s total income returns to the pre-bonus level and new bonuses are required and thus become more frequent.
The value of the bonds is instead discretionary, does not respond to any automatic formula and is not taken into consideration for future increases in equity. Therefore, raises are awarded on a lower basis and the retirement loss continues and deepens “for life”.
Meanwhile, those who do not collect the bonus – over 2 million pensioners and retirees – and the rest of the beneficiaries of social benefits have no compensation and absorb, with a decrease in real terms of their assets, the total loss due to inflation.
DB extension
Source: Clarin
