Accustomed to dealing with macroeconomic urgencies, the Argentine economy can no longer hide a problem that kicked for years, fattening a large snowball that permanently threatens fiscal balance. Perhaps that is why, in the recent agreement with the International Monetary Fund, the need for a retirement reform in Argentina that the Government undertakes for December 2026 appears. While the cost for the treasure of the pension system is considerable (it is the main budget item with pure expense by 2024 of almost 7% of GDP), the problems are not exhausted there.
The diagnosis. Unlike other variables, the retirement system control board shows millimeter increases and low because the deadlines are from decades. What counts is not a photo but the film, demographic trends that impact the labor market, the number of people they contribute and receive benefits, but are also linked to the average productivity of the economy and the rhythm of average economic growth. Everything else is ephemeral issues for estimates.
What emerged as a storm front is the modification of the moratoriums, a regime by which the people who did not reach the minimum of years of contributions (30 in the general system) could access the same with a “purchase” of the missing amount or a removal in installments, according to the regulation of each case. The system, which was generalized since 2006 came to compensate for a serious failure that was verified in the labor market: a minimum part of the workers met the formal requirements to retire in time and form. Thus, 20 years later and at the close of the system last March 31, the moratorium represented 59.5% of existing retirement and pensions (4.3 million people). In 2024, approximately 3 out of 4 new retirement granted by ANSES were through said regime, with 314,000 new cases.
The main shortcomings had to do with three aspects. First, for the growing informality of the Argentine labor system. Another aspect is the demographic change of the last 40 years: less births and more life expectancy. This breaks the relationship between contributors and beneficiaries of the retirement system. It is currently 1.6 workers for each liabilities, when the ideal is almost double. There is also good news that brings another inconvenience: it is estimated that a worker at 60, when they begin to retire, has a 20.4 -year life expectancy and this will spread in the next quarter of a century. What until 1980 was a survival of an average of 10 years today doubled and will grow even more if the parameters are not modified.
Finally, the other problem lies in inequality. In Argentina there are more than 200 exception regimes: that is, in which people can retire with less age than in the general regime, with less years of contributions or with a different calculation of assets. Or a combination of all factors.
The shortcut. In a recent study of Ieral, They emphasize that pension moratoriums arose as an impromptu response to low pension coverage that was derived from labor deterioration. “The high labor inactivity (especially among women) and the massive labor informality made many people could not comply with the minimum of 30 years of contributions required to access retirement ”, They point. At that time, there were only 4.6 million people of retirement age (woman 60; male 65) of which little more than half had retirement or pension in the national pension system.
In 2023, Congress approved a law with patrimonial and valid controls for both men and women. “He pointed to two groups: who are less than 10 years of the retirement age and know that they will not reach 30 years, and those who already are age, but do not contribute enough,” Idesa explains in another special report on the controversial regime. By effect of the moratoriums, the coverage rose from 65% to 93% in 2022. But costs also grew: retirement spending went from 4.3% to 6.6% of GDP for the national system. “This generated a strong fiscal impact and an equity dilemma between those who complied with all the contributions and those who do not”, Highlights.
The agreed term of next December puts all this plurality of projects in a folder and the discussion of a comprehensive system that also contemplates labor market regulations, as the government aspires, ensure a capital interest for these debates.
Patches and solutions. Rafael Rofmanprincipal researcher of CIPPEC He maintains that the signs that the Government has been giving for now is that it will not discuss an isolated modification, but aspires to a comprehensive review for next year. However, to the electoral dynamics, the legislative treatment of initiatives that break the fiscal balance or promote short -term solutions may be aluminted. “There is not much to invent in the field, the problem of financing and improvement of the pension benefit is not Argentine heritage, it occurs throughout the world and with greater emphasis on the most developed economies ”explains the economist. What is also a registered trademark in this type of discussions is the interaction between the “technicians” that explain the situation and apply the decisions and those that, precisely, have to adopt one or another option. Many of the changes are made for the future and do not affect acquired rights, because the legal precariousness of these changes would be shipwrecked. Generally, minimum ages are gradually extended, widowhood benefits are restricted for non -contributors or have to standardize the requirements to converge in the least possible number of regimes. The idea is to maximize the benefits with the same expense or find an intermediate point. “If all the contributions go to the same regime, our estimate is that each retiree could be paid double with the same expense”Rofman adds as an example of the inequalities that the system was generating. What was born as a “cast” system (what is collected is distributed) collapsed in front of the demographic change, the waste of the first years of “surplus” and the introduction of laws that set benefits outside this rule (such as 82% mobile or the one that links the average of the last ten years of contributions).
In short, what is also discussed is the global efficiency of the system. “The pension system is expensive (in the last decade an average of 10% of GDP) and produces little,” Rofman Judgment and quotes as examples to Belgium, who with a more aging population than ours, spends the same already Costa Rica, which, with a more similar population pyramid, spends half in relation to its GDP.
The budget effort was given, in the last year with the liquefaction of pension spending: CIPPEC Calculate that the total expenditure of the entire system in 2024, 15% lower than the average of the last decade was 8.6%. But as the economy stabilizes, this figure is only for a vegetative issue, it will be increased.
Finally, the commitment to greater formalization of the labor system as a way to improve system financing is not something isolated. “Informality is associated with low productivity and what is needed is that Argentina is more and less productive” Add. A new factor to change a vicious circle in virtuoso, avoiding voluntary solutions or proposals that only “close” in the calculation forms.
