First Chamber ruling that declares Alberto Fernández’s retirement mobility law unconstitutional

Chamber A of the Federal Chamber of Mendoza set a strong precedent in pension matters and declared unconstitutional the retirement mobility law sanctioned during the government of former President Alberto Fernández, sanctioned in 2021 and in force until the beginning of Javier Milei’s administration.

It was in the case of Leonardo Evaristo Cortes versus ANSES, where various readjustments were also ordered. But the particular thing about the file is that The ruling introduces questions about other pension reforms that, it concludes, were also detrimental to salaries that retirees receive. It comes at a time when the avalanche of lawsuits against the State reaches peaks of litigation and after the political effect of Milei’s veto of a Congressional law that ordered another readjustment to compensate for part of the loss of the devaluation jump last December.

It was signed on Monday by Ignacio Pérez Curci (who led the vote), Manuel Alberto Pizarro and Gustavo Casiñeira de Dios. And in 34 pages it declares unconstitutional the law that established mobility during the Fernández administration and modifies it – for the case in question originating in Federal Court No. 4 of Mendoza with a ruling in 2022 -, and corrects the “splicing” of the law that had been approved during the government of Mauricio Macri, in 2017 and that it had generated so much controversy.

But, also, introduces modifications to the decrees that suspended the mobility law in force in 2020, in the context of the pandemic and defines replacing the mobility index applied since July 2020 with the CPI. The overall conclusion of the Chamber’s ruling is that it was insufficient, now under a judicial declaration.

The demand

The retiree who sued the ANSES argued “a continuity in the acquisitive loss of retirement mobility, since the entry into force of law 27,426 which, he maintains, has been contrary to the constitutional guarantee provided for by article 14 bis and international treaties” . The House already had precedents for articles being declared unconstitutional. And although it is clear that the law was not completely “regressive”, a “leading case” is recognized in terms of the “considerable loss” that its application caused and that was demonstrated in the case.

“Noting the need to review the constitutionality of the mobility method established by Law No. 27,609; I can affirm that, at this point, After more than 3 years of its entry into force, it is not directly related to the increases that you would receive in your active working life.“, nor with minimum subsistence levels,” indicates Pérez Curci’s first vote. But he makes an extensive analysis of the results and goes back to 2017.

And to do so he cited precedent from the Supreme Court: “our highest court has already held that the modification of the mobility regime cannot result in a detriment to retirement benefits, stating that: “the constitutional validity of the changes to the mobility regimes , that is, the replacement of one method of determining increases with another, carried out in order to achieve better administration or give greater financial predictability to the security system; However, the recognition of this power is subject to an undoubted limitation, since such modifications cannot lead to confiscatory reductions in assets.”

Failure

“The failure of the mobility method of Law 27,609 has occurred in practice due to intrinsic and extrinsic circumstances”indicated the chambermaid when listing that on the one hand the formula of the sum of 50% of the quarterly increase in ANSES collection and 50% for the salary variation of the same period failed, whether it was the highest with the INDEC data ( IS) or the average taxable remuneration of the worker (RIPTE); and on the other hand the economic crisis, inflation and the imbalance between assets and liabilities that had external influence. “Consequence: Loss of the economic value of the retirement asset in relation to the real and current cost of living,” he indicated. This concept was central to the ruling.

And he questioned the formula: “The legislative technique used is deficient to protect the minimum standard of living since it subjects retirement mobility to two parameters that are not related to the cost of living or the proportionality of active salaries, taking 50% of the variation in tax collection by ANSES prepared by the organization and the other, 50 % the RIPTE Salary Index published by the Social Security Secretariat.” And that is why he reviewed the entire series of “bonuses” and patches decreed by the different administrations to shore up assets.

The chambermaids analyzed that in 2021, retirees obtained a total increase due to the application of Law No. 27,609 of 52.67% against an inflation of 50.79%, that is, their assets were appreciated in real terms by 0 .82%. In turn, in 2022, the increase achieved by the aforementioned regulations was 72.45% against an increase in the CPI of 94.75%, which implies a loss of 11.6% against inflation. Likewise, in 2023, pension benefits increased by 110.95% against an inflation of 211.4%, which causes a loss of 33.5%. Finally, in the period between December 2023 and March 2024, the increase was 27.18% and inflation was 51.62%, that is, a depreciation of 16.1%.

The total loss of purchasing power of assets accumulated during the period of validity of Law 27,609 is 50.3%. “The mobility formula established in art. 1 of Law No. 27,609, becomes unconstitutional because it does not live up to the standard of the guarantee contemplated in art. 14 bis of our Magna Carta”, he concluded, for being regressive and violating the right of property.

Solution

The ruling establishes as reasonable to use that update formula that takes into account the Consumer Price Index (CPI), published by INDEC, which reliably reflects the evolution of prices in the economy and, consequently, the loss of currency value in real terms. Without prejudice to this, the ANSES must take the one that is greater, carrying out the calculation in one column using the formula of 27,609 and in another, the one produced by the application of the CPI. And he criticized other formulas that gave an “illusory” nature to the increases or reparations.

Splices

The Chamber’s ruling goes further and establishes a path for the calculation of the case: starting from the connection that would have corresponded to a retiree in January 2021 with the application of the suspended Law 27,426, which had a combined index; review the subsequent quarterly updates, and from there – every three months – recalculate the amount given by the Fernández Law and the amount that would have been applied according to the CPI, the greater of which should be applied. All until the arrival of Decree 274/2024 already in the Milei era which, although it recorded a lost quarter, was not part of the demand.