Even if it is said to be “Retiree’s Silver”both the payment and the calculation of the pensions depend on a set of variables that have nothing to do with the exchange of securities ordered by the Government or with the value, profits or losses of the ANSES Guarantee and Sustainability Fund (FGS) .
The FGS is a reserve fund, a sort of anti-cyclical fund, which it has never been used to pay pensions and pensions currents which are financed by the personal contributions of active workers, employer contributions, taxes going to the Social Security and, since all these incomes are not enough, also with Treasury contributions.
For the first timein 2019 the National Budget Law authorized the use of FGS resources for the Payment of historical reparation to affiliates who withdrew from lawsuits worth $73,661 million, 0.5% of GDP.
Upon retirement, the initial credit is calculated on the basis of the worker’s years of contributions and the updated average earnings of the last 120 months. And that credit is adjusted every 3 months by a mobility formula that takes into account the variation in wages and the collection of taxes that goes to the Social Security.
Between 1994 and 2008, when the private scheme existed, pension and pension funds managed by each of the AFJPs they were directly linked to the balance of individual accounts of members who were share-part of the respective pension fund and pension.
Upon retirement, the initial credit was fixed on the basis of the value of each affiliate’s individual fund, consisting of a certain number of shares, and each person “purchased” a scheduled withdrawal or an annuity.
In the first case, then, the periodic change in the value of the installment affected the monthly payment of the programmed withdrawal; In the second case, since an annuity was “purchased”, from that moment the annuity was released from the value of the quota and its payment was assumed by an insurance company.
While The purpose of the FGS is to address shortfalls in resources for paying for retirements (for example, it was cleared by those caused by the COVID-19 pandemic or historic remediation), said Rafael Rofman, who was AFJP superintendent’s chief of studies and current CIPECC principal investigator clarion compared to the FGS “It has no connection with the payment of pensions.”
And he explained: “Pensions are financed with other budgetary resources, coming from contributions and contributions, specific taxes and, if necessary, Treasury transfers. If FGS has profits, this does not improve current or future retirements, if it has losses, it does not harm them”.
However, he added, “the public debt measures taken by the Government last week are very worrying about their impact on the solvency of the state, but do not have a direct effect on the pension system, although, of course, a less solvent state has a greater risk of not being able to honor its commitments and failure to comply with social security regulations”.
Since 2008, when it received the investment from the AFJP, the value of the FGS had ups and downs that did not affect the payment of pensions. Since 2017, however, due to high inflation, pensions have suffered a double setback: at the time of collection of the first pension credit and, subsequently, each time they are adjusted to the mobility index.
By the time of retirement, the deterioration already begins, because the starting salary is determined based on the average salary of the last 120 updated months. This update is applied on the basis of a coefficient calculated on the basis of the wage evolution of registered workers (RIPTE). And that coefficient has evolved below inflation. Consequentially the retiree’s initial credit begins with a loss more than significant.
Then, that initial credit is adjusted every three months by a mobility index that takes into account the change in wages and the collection of taxes that goes to Social Security and that also varies below inflation.
Source: Clarin
