What does the Meili government want to do with the US$76,000 million of retirees?
(CNN Spanish) — If we take the official exchange rate of the US currency as a reference, most retirees earn minimum wage in Argentina, about US$123 per month. According to forecast experts’ estimates, there are more than five million people there.
But what many don’t know is that, at the same time, retirees own a fund worth about US$76 billion, according to a statement released in December by outgoing officials of the National Social Security Administration (ANSES).
This amount belongs to the Sustainability Guarantee Fund (FGS), which can be administered by the National Treasury, within the framework of the pension emergency declared by President Xavier Miley, if Chapter Seven of the economic restructuring section of the project is approved. The basis and starting point for the independence of Argentina, which the Executive Branch had sent to Congress for consideration in extraordinary session a few days earlier.
What is the Sustainability Guarantee Fund (FGS)?
This financial fund was created in 2007 by President Néstor Kirchner. Its purpose is to protect the pension system from economic crises and it is composed of various financial instruments. Retirement and pensions are not paid out of the month-to-month fund, but it was created for that purpose if necessary.
Furthermore, the Fund worked throughout its time to promote the growth of the national economy, fostering the creation of registered employment by investing in productive projects that strengthen the system and generate profitability.
“The idea of the fund was always to have the resources to pay benefits, because it was created from money contributed by retirees to the AFJP system,” says Andrea Falcone, a lawyer who specializes in pension matters. However he clarifies that “the fund was always used for various schemes that were not necessarily for retirees.”
Dr. Cristian Gonzalez D’Alessandro, an expert in social security issues, confirms this concept. “The fund was never used for its original purpose,” says the pensioner. Remember also that the FGS is made up of shares that the state owns in private companies, among other assets.
Javier Miley, President of Argentina.
For whom does the government want FGS?
The chapter in question, which is part of the project that Congress will debate, does not mention any specific objective. There is still no definition from the government regarding the requirement of this standard. Meanwhile, experts offer different possibilities.
“The law creating the fund states that the sole destiny of FGS is to survive a crisis of the system. Today retired people are in humanitarian crisis. But apparently the intention is to do more of the same, but at the same time, to add the FGS to the national treasury,” says Third Age defender Eugenio Semino.
On the other hand, Falcone refers to the lack of systems as a type for the use of FGS. “If you compare the income from workers’ and employers’ contributions to what ANSWER pays into superannuation and pensions, you have a deficit of about 51%, and that is financed by the Treasury, so I think That’s how they’re thinking of covering the losses. FGS money.”
The lawyer also says that, if this were to happen, the absence of a countercyclical fund, an essential feature of the FGS, due to Argentina’s economic situation, would further complicate a system that has demographic and cyclical problems.
The fate of FGS remains in doubt. Gonzalez D’Alessandro thinks it may serve the government for some other purpose.
“I think FGS resources are going to be liquidated, they will be used to repay debt, sell shares and they will also serve to start the dollarization process.” He also says that the system could lose stability and lead to privatization.
The future of this fund is in the hands of Congress. Once the legislation is approved, if it happens, the FGS will pass into the hands of the National Treasury and its fate will be known.