Report Nº: 109608/12/2024
The cancellation of Cristina Kirchner’s retirement and pension is a source of intense controversy. In fact, this case is only one example of a more general problem, which is the proliferation of special regimes and the multiple coverage generated by the accumulation of old retirement plus the widow’s pension.
The decision to cancel Cristina Kirchner’s retirement and pension causes controversy. The case is complex because political issues related to corruption are mixed with issues about rights related to the pension system. Focusing exclusively on the pension system’s issue, the case leads to an analysis of pension rules with a high impact on equity and sustainability.
On the one hand, there are the special regimes. In the pension system, there is a set of regulations that apply in general and, at the same time, many special regimes that benefit certain groups of workers by granting them exceptional treatment. These include lower age and years of service requirements, a higher benefit and a more advantageous index rule. On the other hand, there are widow pensions. This is the right of a person who proves to have been living with a retiree who dies to receive a widow pension for life.
How relevant are these regulations? Adding up all the pension schemes in Argentina today, there are 10 million retirements and pensions. According to the regulations under which they were granted, the following typologies can be distinguished:
These data show that only 1 out of every 5 retirements and pensions corresponds to the general regime. The other 4 are regulated by special or differential regimes or were granted under the general regime but with the exception of not complying with all the contributions. In other words, in the Argentine pension system, the exception is the rule. Regarding pensions, it is estimated that 1 out of every 5 beneficiaries receive more than one benefit, i.e., in addition to their retirement, they receive a pension derived from the death of their partner.
Although the regime for ex-presidents and ex-vice presidents is very controversial, from the point of view of system financing it has a minor impact. Much more important is the accumulation of regimes through which many people access special treatment. This phenomenon explains an important part of the financial and equity problems of the pension system. In the same sense, the fact that Cristina Kirchner adds to her retirement the pension derived from her ex-husband is not an isolated case, but just a testimony of a massive, growing and very difficult-to-manage phenomenon. For example, among the other pensions derived from ex-presidents, there are cases where, upon the ex-president’s death, whoever accessed the pension was separated from her husband. It should be considered that the derived pension was contemplated when female labor participation was very low and access to a pension without contributions was not contemplated. Nowadays, it is more common for women to have their own jobs and all of them, once they reach retirement age, have access to their own pensions. Under this new scenario, pensions lead to the massification of double coverage.
Beyond the irritation produced by the high benefits granted to former presidents, the main challenge is to address a comprehensive ordering of the system. The orientation should be that all citizens should be equal before the law, i.e., the tendency should be to gradually eliminate all special treatments. Under the same logic, the derived pension should be voluntary coverage, i.e., the living pensioner should designate the person who will receive the pension in the event of his death and make additional contributions to cover its cost. This simplifies pension management, avoids controversies and discretionality and contributes to the sustainability of the system.
One of the points of the May Act contemplates the pension system reorganization. In March of next year, the moratoriums expire, increasing the urgency to address this complex task. Attention and energy should be focused on this challenge, beyond some specific cases that reach public transcendence but are of marginal effect.
