The discussion for the social security reform continues to be bogged down by negotiations between the executive branch and Open Town Hall (CA)which asks to reduce from 25 to 15 the number of years that are considered for the retirement calculation in the bill, something that would increase the highest pensions and would liquefy the expected fiscal adjustment.
“To take him to 25 years, to someone who contributed 30 years, is to introduce very depressed salaries into the average of his calculation, the first of his career. That is not good, we have to reduce that term. We propose 15 years”, affirmed the leader of CA, Guido Manini Rioswho stated that if the government is inflexible, his space will not vote on the project.
To see what impact this change could have if it materialized, scope.com spoke with the economist and director of the Center for Economic Research (Cinve), Gonzalo Zúnino.
The change in the retirement calculation would increase high salaries
For Zunino, “it could have a significant impactespecially in medium and medium-high retirements”, with an estimated difference and roughly between 4 and 8% elderly.
Reduce the number of years it takes to calculate the basic retirement salary It precisely implies that a greater number of the first years of activity be taken into account. Therefore, “the impact is an increase in retirements, especially in those life cycle curves that are more growing,” according to Zunino.
The director of Cinve explained that the more limited towards the tip is the period that is considered, the result grows. Although the study center has not yet made the final calculations and it is difficult to know in advance, the increase in these assets with the modification “can be between 4 and 8%, depending on the amounts,” said the economist.
In the case of very low passivities, “the work career is more stable and many times the pure calculation of retirement is below the minimum; So, in any case, they bring you closer to the minimum, ”he explained. For them, “It’s probably the same, or the difference is very small.”.
The effect on the expected fiscal adjustment, more “liquefied”
In the original government proposal, Rodolfo Saldaínwho led the preparation of the project, estimated that, if the reform is approved, the pension system deficit will stabilize at 1.7% or 1.8%instead of growing until it reaches close to 5 points.
On the other hand, if the government project is approved, in 2025 the deficit would be 0.6%, it would rise one tenth by 2030 and it would drop to 0.4% by 2040.
“This does not make the reform totally ineffective, but it does liquefies the impact expected from a containment of spending of about 2.5 points”, Zunino said about the CA initiative, which would have an effect on between 40 and 60% of total retirements.
“The bulk of the adjustment occurs due to the postponement of retirement. This means that, more than because of the drop in retirement, it will be due to the shift in age, because people are going to collect retirement for less time, ”explained the director of Cinve.
Meanwhile, by keeping the minimum age “firm” at 65, “this liquefies the effect, because the impact that is being sought to achieve insurance is reduced,” said the specialist. As to to what extent, it is still unknown, since the calculations have not yet been carried out in detail.
Source: Ambito
