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What does the Milley government want to do with the $76 billion in retirees?

(CNN Spanish) — If the official U.S. dollar exchange rate is used as a guide, most retirees earn a minimum wage of approximately $123 per month in Argentina. Forecasters estimate the population at more than five million.

But what many people don’t know is that retirees have funds worth nearly $76 billion, according to a December statement from the outgoing National Institute of Social Security (ANSES).

The amount belongs to the Sustainability Guarantee Fund (FGS), which may be managed by the National Treasury within the framework of the emergency decree on pensions issued by President Javier Milley if Chapter 7, the economic restructuring component of the project, is approved . The Foundations and Starting Points of Argentinian Freedom, which the Executive sent a few days ago to Congress for consideration in a special session.

What is the Sustainability Guarantee Fund (FGS)?

The financial fund was created in 2007 by President Néstor Kirchner. Its goal is to protect the pension system from the effects of economic crises and consists of different financial instruments. Pensions and pensions are not paid out from this fund on a month-to-month basis, but it is set up for this purpose if necessary.

In addition, the Fund has been committed to investing in productive projects to promote the development of the national economy and promote the generation of registered employment, thus strengthening the system and generating profits.

“The idea of ​​the fund was always to have the resources to pay benefits because it was created with funds contributed by retirees in the AFJP system,” Andrea Falcone, a lawyer who specializes in pension matters express. Although he clarified that “the fund was always used for different schemes that were not necessarily for retirees.”

Dr. Cristian González D’Alessandro, an expert on social security issues, reiterated this concept. “The fund was never used for its original purpose,” the pensioner said. Also keep in mind that FGS consists of the state’s shares in private companies, among other assets.

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What does the government want with FGS?

The chapter is part of a project that will be debated in Congress and does not mention any specific goals. The government has yet to define the need for the standard. Experts, meanwhile, are keeping varying odds open.

“The law that created the fund stipulates that the FGS’s only destiny is to avoid a systemic crisis. Today retirees are facing a humanitarian crisis. But clearly the intention is to do more of the same, but by integrating the FGS into the state treasury,” pp. said Eugenio Semino, defender of the three eras.

Falcone, on the other hand, calls the system’s shortcomings a variation of using FGS. “If you compare the income from workers’ and employers’ contributions to the pensions and pensions paid by ANSES, the deficit is about 51% and that funding is provided by the Treasury, so I think they are looking at using FGS money.”

The lawyer also believes that if this happens, the lack of countercyclical funds (an essential feature of FGS) due to Argentina’s economic situation will further complicate a system with demographic and cyclical problems.

The fate of the FGS remains in doubt. Gonzalez D’Alessandro thought it could serve another purpose for the government.

“I know that FGS resources will be liquefied, they will be used to pay down debt, sell shares, and they will also be used to start the dollarization process.” He also believes that the system may lose sustainability and inevitably lead to privatization .

The future of the fund lies in the hands of Congress. Once the law is approved, if that happens, the FGS will be handed over to the National Treasury and its fate will be known.

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