Difficulties and Challenges of the Argentine Pension Regime

Abstract

It is necessary to address the difficulties and challenges regarding pensions and retirement in Argentine society in order to face economic and political inequalities. It is not easy to know which is the optimal social security system in Argentina. The lack of transparency in the Argentine state system created a new mechanism that displaced the pay-as-you-go system. Therefore, it was announced that this new structure based on the Chilean pension system came to Argentina as a new form of private capitalization, leaving aside the role of the State and overvaluing the one that relates to the market, without thinking about the risks that it entails. It is mentioned that through the reformed legislation, the retirement and pension system will be unified into a single regime called the Argentine Integrated Social Security System (SIPA). The distribution and capitalization systems are analyzed, clarifying the terms “distribution” and “capitalization”, also mentioning their characteristics and the three meanings adopted. This text presents the postures of the Reform of the Argentine Social Security System, as well the agreements with the International Monetary Fund (IMF), and finally, the Social Security Reform project approved by the Congress. It is concluded that the greatest challenge that the next administration will have to face will be to generate a consensual and integrated pension reform that tends to be universal, public, sustainable and distributive, showing that every political-economic decision exerts influence on public and private circles as well as in active and passive sectors.