The purchasing power of pensions recovered between 29% and 46% between February and May of this year. Likewise, minimum retirements with bonuses are still 26% below those of 2017 and the rest of salaries are 43% below those of 2017.
The purchasing power of retirees has been falling since 2018. An important group of retirees had the incorporation of compensatory bonuses, which sought to cushion the loss generated by an inflation rate that exceeded their salaries. It is a topic that I have already developed on several occasions. In this report I analyze the monthly retirement in 3 moments in time: the average for the year 2017, the month of February 2024 and the month of May 2024. Depending on the expected inflation and the current salary update scheme, in the end The possible situation of retirees develops in the coming months.
The situation of retirees with the minimum who receive bonuses
These retirees received, in June 2024 currency, an average monthly salary of $370,000 in 2017. In the month of February 2024 they had a monthly salary of $212,400, including bonuses. This was the month with the lowest purchasing power in recent years, registering a drop of 43% compared to the 2017 average.
Since February, real retirements have been increasing. The amount for the month of May, including the $70,000 bonus, was $273,000 in constant currency. Since February’s bottom, retirement purchasing power rose 29%. Compared to the 2017 average, the relative drop is still very large, 26%.
Given the current monthly adjustment scheme, if inflation remained relatively constant from now on, real assets would stabilize at these current values. Obviously, they would be well below those of 2017.
A key aspect that the government must resolve in the short term is what dynamics it will give to compensatory bonds. If, for example, the value of the bond were left fixed at $70,000, the liquefaction that inflation will generate, even though it is low, will mean that the real income of this important mass of retirees, after reaching a maximum in this month of June, start to decrease month by month.
The scheme is simple: what the real growth of assets implies in silver is less than the loss of silver generated by the liquefaction of the bond if it remains fixed at $70,000. This bonus issue is very significant. What the government decides to do in July is key.
In all cases, real income will be much lower than that registered in 2017. The Chamber of Deputies approved a project that implies, among other things, improving real assets by 8.5%. The President of the Nation has stated that he will veto any project that puts the fiscal balance at risk.
Future sustainability is the key. It would be ideal for Congress to sanction at the same time the change in expenses or income that guarantees that the spending that is increasing does not have a net negative impact on the fiscal result.
There should soon be a comprehensive reform of the pension system, within a comprehensive tax reform, that allows retirees to at least recover the purchasing power of 2017. Under the condition of fiscal balance, society must define a mechanism that guarantees that retirees who contributed during their active life can at least recover the purchasing power of 2017 and be maintained in a sustained manner. There is not much time for discussion.
Source: Ambito
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