Report Nº: 105510/02/2024


The government wants the assets of the Sustainability Guarantee Pension Fund (FGS) to be transferred to the Treasury. Before its transfer, it must be used to cancel the long-standing debt that the ANSES has with national retirees for lawsuits and with the provinces for the deficit of the pension provincial funds.

In the origins of the pension system, the provinces created pension funds for their public employees. Due to defects in their organizational rules, they swiftly went into deficit. The contributions of active public employees were not enough to finance the pensions of retired public employees. As a result, the provincial pension funds became one of the most destabilizing factors in provincial public finances.

In the 1990s, within the framework of a comprehensive reorganization of public finance, a process of transferring provincial funds to the ANSES (the national pension agency) was implemented. Ten provinces adhered: Catamarca, Jujuy, La Rioja, Mendoza, Río Negro, Salta, San Juan, San Luis, Santiago and Tucumán. CABA is in the same situation because it has never had its own pension system. But the rest of the provinces opted to keep their pension funds. They are Buenos Aires, Santa Fe, Córdoba, Entre Ríos, Formosa, Chaco, Misiones, Corrientes, La Pampa, Neuquén, Chubut, Santa Cruz and Tierra del Fuego. 

The transfer of the funds has an impact on national public finance. One way to measure it is the deficit that the transferred provincial funds generate for the ANSES. According to data from the Ministry of Economy referring to 2023 it is observed that::

  • The pension contributions of public employees working in provinces that transferred their pension funds were $84 billion.
  • Expenditure on pensions of former public employees of the provinces that transferred their pension funds was $364 billion.
  • In other words, the deficit generated by the funds transferred to the ANSES amounts to $280 billion.  

These data show that for every 3 pesos that ANSES spends in pensions of former public employees of provinces with transferred funds, it receives only 1 peso in contributions. This imbalance underlies a great inequity: the citizens of the 13 provinces that did not transfer their funds pay taxes to finance the deficit of the pension funds transferred to the national system and, in addition, they pay provincial taxes to finance the deficit of the pension funds of the public employees of their province. 

The situation generated tensions with the provinces with non-transferred pension funds, including lawsuits. In order to settle the issue and put all provinces on an equal footing, it was established –by law– that ANSES must transfer to the 13 provinces that maintain their pension funds an amount equivalent to the deficit the fund would generate if it had been transferred. In this way equitable treatment is achieved. In order to implement it, the provinces have to provide complete information on their contributors and beneficiaries so that ANSES simulates the national pension rules every year to calculate the imbalance it would have faced. As the simulations are made after the end of the year, the regulations provide for advances based on the last estimated imbalance. Once the calculation has been made, the balance between the amount of the imbalance and the advances made is determined. 

The scheme is consistent since it avoids asymmetries among the provinces. But in practice, it works very badly. ANSES accumulates more than 4 years without making the calculations. The distortions are aggravated because the advances are made arbitrarily and at historical value. This has led to the accumulation of ANSES debts with the provinces, several of which are now in court. 

It is of little use to show fiscal balance if liabilities continue to accumulate which are not recorded as such in public accounting but which, nonetheless, are still enforceable. Solvency and fiscal sustainability require addressing this problem and the way to do it is by providing in the omnibus law that the assets of the FGS be used to cancel the liabilities accumulated by the pension system. The same strategy must be applied to the debts accumulated with national beneficiaries claiming pension readjustments in lawsuits with definitive sentences, to whom ANSES denies payment. 


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