The Argentine pension system is a solidarity-based pay-as-you-go system: formal active workers, with our contributions, finance the benefits of liabilities, whether they receive contributory or non-contributory retirements or pensions. The national state collects personal pension contributions and distributes them (hence the pay-as-you-go regime) among current liabilities. To these funds are added others coming from taxes and the national treasury.
The numbers are not enough
The relationship between formal workers necessary to finance the passive universe was lost a long time ago, which is why solidarity is not enough. In our country we have almost 20 million citizens receiving some benefit from the national state between ordinary retirements, disability, death, special regimes, moratoriums, non-contributory pensions for disability, old age, mother of seven children and AUH. This payment commitment assumed by the national state is for life with each beneficiary as long as the situation that gave rise to the benefit is maintained.
At the same time, we have approximately 10 and a half million formal workers, the rest of the citizens are informal workers and children; Therefore, there would be no more drinking population to contribute and feed the system, in order to help with its sustainability.
Solution alternative
Given the limited possibilities of accessing formal work and the needs of the system to collect pension contributions to sustain the payment of pension benefits, an alternative solution would be that every person who receives a non-contributory pension has the responsibility of making contributions from the 18 years of age or from when you access the pension and until the retirement age, even if the contribution is deducted from the salary you receive and referred to the pension collection agency. So when accessing the non-contributory pension, the holder will have to contribute compulsorily until 60 or 65 years of age; The system would have greater pension collection to pay current pension benefits and beneficiaries of non-contributory pensions, upon turning 60 or 65, would access ordinary retirement. Except PUAM beneficiaries.
Currently, they receive the non-contributory pension from the granting of the benefit, without having contributed to the system and without making contributions, and when they reach retirement age, they access retirement by moratorium, substantially improving their monthly income.
The alternative proposed entails a modification to current legislation so that it is compatible to collect a pension with the pension contribution; If this becomes a reality, it would give a lot of air to the system, it would increase pension collection to meet the payment of benefits to current liabilities.
In short, it could be required that they make a minimum contribution to the system from the same amount of pension they receive in order to achieve greater collection and sustainability, as occurs with pension moratoriums for those whose contributions are deducted from the same assets.
Queries: [email protected] – Telephone: 381 5587262
You may also like
by CEDOC