The Government would modify the pension mobility formula (DNU) by decree. As it turned out, the index that will be used from April will take into account the February CPI and will provide a compensation of between 12 and 14% due to the inflation accumulated in the first months of the year. Then Starting in May it would be adjusted monthly by the CPI with a 2-month lag. And there would be no recovery for the loss of recent years. Nor does the recovery improve real wages or the economy.
For example, March CPI would be calculated in May. In previous versions the official adjustment for compensation was 10%. The majority of the opposition proposes it the compensation is 20.6%, the same percentage as January inflation. And that difference got in the way of getting a bill through Congress.
The change in mobility through a DNU will certainly open a political and judicial debate, even more so because the Congress works and the treatment of this very topic important for 7 million pensioners and pensioners and another 10 million children whose parents collect AUH or the family salary increased, after the withdrawal of the megaproject from Congress. On the other hand, what happened during the government of Mauricio Macri and Alberto Fernández would be repeated: that the combination of formulas will begin with a further real loss of assets.
February inflation was 13.2% plus a cumulative 12% more would bring the increase to 26.8%. And with more than 14%, the return would be 29%. The 26.8 or 29% would be applied to current March salaries. This increase would not include the bonuses that with decree no. 268/2024 had already been published in the Official Journal. Government decided to keep the value of the bond in April up to $70,000as received by minimum wage pensioners this March.
Currently the minimum asset is $134,445. In April it would rise to $170,000, plus the $70,000 bonus, the total would be $245,000 and represent a 20% increase. If the bonus were included, the total would be approximately $263,000, (+28.6%).
If it were confirmed that the increase does not concern bonuses, pensioners and pensioners with minimum income would have a lower percentage increase than those with average income and higher pensions.
Compared to December, the cumulative increase in wages would be between 52% and 64% compared to inflation of around 72% (36.6% January-February + 15% March + 10% April). According to Nadin Argañaraz, due to the loss that pensioners had in the face of inflation in December and the following months that the March increase (27.18%) did not cover, the increase in wages should rise to 25% in April and add February inflation (13.2%), that is, an increase of 41.5%, including the bonus.
If these data are confirmed, the change in the mobility formula, as happened with Mauricio Macri and Alberto Fernándezwould start with a decrease in pension amountshigher than the losses suffered by pensioners and pensioners under the two previous governments, with the aggravating circumstance that the lowest paid would suffer a greater loss.
According to Studio Paz Zurita, “mobility through IPC does not recover what has been lost, which is lost forever unless the pensioner makes a legal request. And until salaries are updated by the CPI, the flattening of pensions will continue and new pensioners will continue to lose purchasing power compared to their initial salary”.
According to experts, the formula does not allow the recovery of what has been lost
The government changes pensions by decree so that in April they are updated according to the monthly consumer price index (CPI) plus a compensation that would be between 12 and 14% for January inflation.
Starting from May the government intends to update pensions according to the monthly CPI.
According to experts, mobility via IPC does not recover what has been lost.
In his view, this is lost forever unless the pensioner makes a legal claim.
And until salaries are updated by the CPI, the flattening of pensions will continue and new pensioners will continue to lose purchasing power compared to their initial earnings. The fact is that adjusting for inflation alone would maintain the lifetime pension loss of recent years, which according to specialists averages around 50%.
Source: Clarin
