Official admits that with official formula, retirees lose a quarter of increase

With the official pension mobility project which “launches a semi-annual formula, retirees lose a quarter increase ”, says economist and director of Banco Nación, Claudio Lozano, of the government’s proposal to take into account the 5% increase in December or as an advance from the one to be applied in March 2021.

“Since the end of 2017, there are two problems that remain constant in the economic and social management of Argentina. Negotiations with the IMF and systematic and permanent adjustment of pension expenditure. First, the Cambiemos government changed the update formula to save about $ 64,000 million and under the macro policy, the assets lost 23% of their purchasing power, ”Lozano explains.

The official declared that “in his first definitions, Minister Martín Guzmán suspended the macrista formula also in order to avoid the fiscal impact associated with an annual increase of 42% of pensions and this is the result that the current formula gave . Its replacement by discretionary quarterly increases, a decision taken as part of the commitment to improve minimum credit, did not maintain this target relative to the price index, resulted in a decrease in minimum credit relative to food price trends and of course a greater deterioration of benefits above the minimum ”.

After this assessment of the last three years in terms of retirement, Lozano wonders about the “link” between the increases by decree and the one to be applied in March, if the new law on mobility is approved because “retirees lose a quarter increase “since the 5% increase in December it would take into account the increase to be applied in March.

“Now, with this splicing scheme and the implementation of a semi-annual formula, retirees lose a quarter of the increase and, in the name of the need to deindex the economy, they are not asked to price managers , but to retirees. that they are the ones who emit this signal by putting their purchasing power at stake. Much has been said on the new face of the IMF. But when it comes to the link between negotiations with the organization and its adjusting effect on pension spending, the reality remains the same ”.

Lozano also questions the new mobility formula proposed by the government because does not have a clause establishing a floor for increases equivalent to rising prices. And also because in a context of high inflation, the increases will be done every 6 months instead of being quarterly.

QA