From March 2021, retirements, pensions and allowances will be updated again by a mobility index, after the approval of the law in Congress. According to estimates by social security experts, the quarterly increase could be around 8 percent. These are projections, because the rise cannot be calculated exactly. Data on the variation of salaries and collection are taken from the Anses between October and December of this year, which have not yet been officially published or released.
March mobility would be around 8 percent, according to pension lawyer Miguel Fernández Pastor, or 7.4 percent, according to Sergio Rottenschweiler, an economist specializing in social security. Both spoke at the mixed bicameral committee on pension mobility. It’s about projections. For the formula that is applied in March 2021, the evolution of wages between October and December 2020 is taken. So far, only the Ripte data for October is found, of 4.6 percent, which measures wages in the sector formal. The November and December release is still missing. In addition, it will be compared with the Index of wages of the Indec, and the best of the two will be taken. The latest data in this regard is from September.
Also in the formula that will be applied for the March increase, the year-on-year comparison of the collection of Anses tax resources during the fourth quarter is taken. The data is public, although difficult to access, and is released by the Ministry of the Economy. It is up to November, so the rest were estimated by Rottenschweiler. Although this formula is similar to the one in force between 2009 and 2017, the economist states that it is not possible to observe what happened and extrapolate it forward, given that the composition of Anses’ tax resources changed. For example, Income tax was replaced by check tax.
The Anses technical teams have also made their estimates, but are not making them public. During commission meetings in Congress, they informed deputies and senators that the increase in March would be about 11.9 percent. At that time, the bill proposed semiannual increases, in March and September of each year, and for that, what happened during the second semester of the previous year was taken in March with wages and collection.
From the agency they explained that the estimates could be more precise because there were data for several months of the semester, while currently what happened in a quarter will be taken, and the figures for October are only available. With the changes that were made to the bill in the Senate, the update of the bill went from being semiannual to quarterly, therefore the initially estimated increase of 11.9 percent will be less.
The Government considers that the assets with the new formula will win over inflation in 2021. Carlos Heller, deputy of the Frente de Todos, ventured to estimate a rise of 8 to 10 points higher. In his presentation in Congress, he affirmed that salaries are going to grow in a real way as a government policy, and the collection will increase due to an improvement in economic activity and a tax reform.
After a historic drop this year in economic activity, all international consultants and reports estimate a rebound for 2021. However, Deputy Jorge Sarghini, from the Federal Consensus, asked for “prudence”, given the uncertainty that it has not been solved. the health crisis neither in Argentina nor in the world.
What would happen then if, despite the government’s projections, revenue and wages do not recover due to the pandemic? Faced with this query, Fernanda Raverta, head of Anses, stated: “In some exceptional matter, there is always the power of President Alberto Fernández de pay a bonus when things get ugly “.
Another aspect that could make the 2021 increases vary is the regulation of the law, which should be published by February. The law speaks of a homogeneous comparison between variables, what experts call the “constant legislation clause”. What you are looking for is that regulatory changes do not affect the mobility calculation, such as, for example, taking out a tax that is part of the collection of Anses. Also, determine which beneficiaries and benefits are going to be taken, in the event of a moratorium for example. Anyway, according to an official source, these modifications do not change much, because the comparisons are always made on variables, and not on stocks.
The big question is when retirees they will regain lost purchasing power. Between 2016 and 2020, the economy only grew in 2017. In those years, with the mobility of the government of Cristina Kirchner, and since 2018 with that of Mauricio Macri, retirees lost to inflation. This 2020, with mobility suspended and increases by decree, 80 percent of retirees equaled inflation. The deputy Máximo Kirchner advanced in the closing speech of the session that the assets “are not going to recover all the points lost next year.”