What does the Millay government intend to do with the US$76,000 million of retirees?

(CNN Spanish) — If we take the official exchange rate of the US currency, most retirees earn the minimum salary in Argentina at around US$123 per month. According to the estimates of forecasters, there are more than five million people.

But what many people don't know is that, at the same time, retirees hold funds worth nearly US$76 billion, according to a report released in December by outgoing officials of the National Social Security Administration (ANSES).

This amount belongs to the Stability Guarantee Fund (FGS), which will be managed by the National Treasury if chapter seven of the economic restructuring section of the plan is approved, within the framework of the pension emergency decreed by President Javier Millay. Fundamentals and starting points for Argentina's independence, a few days ago the executive branch sent Congress in special session to consider.

What is Sustainability Guarantee Fund (FGS)?

The fund was created in 2007 by President Nestor Kirchner. Its purpose is to protect the pension system from economic crises and is made up of various financial instruments. Pensions and pensions are not paid monthly with the fund, but if required it is created for that purpose.

In addition, the Fund worked at this time to invest in productive projects to promote the growth of the national economy and the creation of registered employment that would strengthen the system and generate profits.

“The idea of ​​the fund is always to have the resources to pay benefits, because it was created with money contributed by retirees to the AFJP system,” says Andrea Falcone, a lawyer specializing in pension matters. Although he clarified, “the funds were always used for different schemes that were not necessarily for the retirees.”

Dr. Cristian Gonzalez D'Alessandro, an expert on social security issues, reaffirms this view. “The fund was never used for its original purpose,” says the pensioner. Also remember that FGS is made up of shares and other assets held by the government in private companies.

Javier Millay, President of Argentina.

Why does the government want FGS?

The chapter in question, part of a plan Congress is debating, does not address any specific objective. There is no definition yet from the government regarding the requirement of this standard. Meanwhile, experts maintain different possibilities.

“The law that created the fund says that the only rule that the FGS can have is to avoid a crisis of the system. Today retirees are in a humanitarian crisis. But it is clear that more of the same should be done, but with this, by entering the FGS into the national treasury,” says Eugenio Semino, a defender of the Third Age.

On the other hand, Falcone refers to the lack of organization as an alternative to using FGS. “If you compare the income from contributions from workers and employers to the income paid by ANSES in retirement and pensions, you have a shortfall of about 51%, which is funded by the Treasury, so I think they are thinking of making up the shortfall. FGS money.”

If that happens, the lack of countercyclical funding, an essential characteristic of FGS, will further complicate the system, which has demographic and cyclical problems, due to Argentina's economic situation, the lawyer says.

There are doubts about the fate of FGS. González D'Alessandro thinks the government can serve another purpose.

“I understand that the FGS resources are going to be liquefied, used to pay down debt, sell shares, and help start the dollarization process.” He also says that the system will lose stability and inevitably lead to privatization.

The future of this fund rests in the hands of Congress. Once the law is approved, if it happens, the FGS will go into the hands of the National Treasury and its fate will be known.