(CNN Spanish) — If we take the official exchange rate of the US currency as a reference, most retirees earn the minimum wage in Argentina, about US$123 per month. According to forecasting experts, there are more than five million people.
But what many people don’t know is that, at the same time, retirees own funds worth about US$76 billion, according to a statement released in December by the outgoing authorities of the National Social Security Administration (ANSES).
This amount belongs to the Sustainability Guarantee Fund (FGS) which, in the framework of the pension crisis announced by President Javier Milli, could be administered by the National Treasury if the seven chapters of the economic restructuring section of the project are approved. The law lays down the foundations and starting points for Argentina’s independence, which the executive branch sent a few days ago to Congress in special sessions for consideration.
What is Sustainability Guarantee Fund (FGS)?
This financial fund was created in 2007 by President Nestor Kirchner. It aims to protect the pension system from financial crises and is composed of various financial instruments. Retirement and pension funds are not paid from month to month, but were created for that purpose if necessary.
In addition, the Fund worked all this time to promote the development of the national economy, to promote the production of registered employment, to invest in productive projects that strengthen the system and generate profitability.
“The idea of the fund was always to have resources to pay benefits, because it was created from money contributed by retirees to the AFJP system,” says Andrea Falcone, a lawyer specializing in pension matters. Yet it clarified that “the funds were always used for various schemes which were not necessary for the retirees.”
Expert on social security issues Dr. Cristian González D’Alessandro reaffirms this concept. “The fund was never used for its original purpose,” says the pensioner. Also remember that FGS is made up of shares held by the state in private companies, among other assets.
Javier Milli, President of Argentina.
What does the government want for FGS?
The chapter in question, which is part of the project which the Congress will discuss, does not refer to any specific objective. No definitions have yet been made by the government regarding the need for this standard. Meanwhile, experts maintain various possibilities.
“The law that created the fund says that the FGS has the only destiny to survive the crisis of the system. Today the retirees are in a humanitarian crisis. But apparently the intention is to do more, but with this, by introducing the FGS into the national treasury,” says Eugenio Semino. is, the Defender of the Third Age.
On the other hand, the use of FGS refers to the loss of the Falcon system. “If you compare the income from workers’ and employers’ contributions to the ANSES retirement and pension payments, you have a deficit of about 51%, and that is financed by the Treasury, so I think they are looking to cover the deficit. FGS money.”
The lawyer has also said that, if this happens, the absence of a countercyclical fund, an essential feature of the FGS, will further complicate a system with demographic and cyclical problems due to Argentina’s economic situation.
Doubts remain about the future of FGS. Gonzalez D’Alessandro thinks he can serve the government for another purpose.
“I understand that FGS resources are going to be liquefied, they will be used to repay debt, sell shares and it will also serve to start the dollarization process.” It also says the system may lose sustainability and lead unduly to privatisation.
The future of this fund is in the hands of the 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.
