As Vice President Victoria Villarruel turned her attention to a new challenge that could put Javier Milei’s government’s zero deficit goal at risk, the retirement formula. Despite receiving partial approval from the Deputies, the treatment of this project was put on hold by the vice president in order to seek agreements for a comprehensive reform of the pension system. Currently, Villarruel has not given any direction to the committees regarding the project, but it is possible that a plenary session of the Labor and Social Security committees will be convened.
The Senate has not provided a specific timeline for addressing the retirement issue, but it is expected to take several weeks. In the meantime, opposition parties are looking to ease tensions after recent discussions on the Bases Law and fiscal package. There is an agreement in both chambers of Congress to postpone contentious issues at least until July during winter break to allow the government time to implement newly approved rules and address economic challenges ahead.
Villarruel’s office, along with their allies, are working on a plan for a comprehensive reform of the pension system to minimize political damage. The Senate has requested reports from assessing the fiscal impact of the retirement formula approved by Deputies. It is anticipated that actual expenditure could be higher than initially estimated in Deputies, potentially leading to modifications in the plan.
The new retirement formula approved by Deputies is based on INDEC Consumer Price Index with an additional 8% increase to account for inflation discrepancies. It also includes an annual update based on salary increases and sets a minimum pension amount. Debts with Pension funds will be financed by specific tax resources allocated ANSES without touching Sustainability Guarantee Fund. The Senate is expected to address this issue in upcoming weeks with potential support from various sectors securing its passage
