When the new is not so new

Buenos Aires Herald. 28 de agosto de 2016.

The “historic reparation” for pensioners leads to a new vicious circle.

Law 27,260, approved weeks ago, provides the creation of the National Programme for the Historic Reparation to Retirees and Pensioners. This decision seeks to repair the debts that ANSES holds with retirees, the reason for the vast majority of litigation against the entity. To understand the issue better, with the one-peso/one-dollar convertibility peg, and for more than 10 years, pensions were fixed until 2003, when the new government, with Sergio Massa heading the agency, began to give the first discretionary increases. At the same time, during this period, the wages considered to be the basis for the calculation of retirement (the last 120 months) were not updated either. This combination of the lack of updating of remuneration and retirements had a devastating effect on beneficiaries. Not only the initial low pension established on the basis of old wages but also this retirement, frozen for years, were already underestimated when they began receiving hikes.

These facts caused a lot of retirees to litigate against ANSES, demanding the recalculation of their pensions. Out of more than eight million retirees in Argentina, around 70,000 went to court and obtained a final ruling in favour with 380,000 cases still open.

In addition, there are about 1.8 million retirees who had their benefit miscalculated and did not initiate any legal action. This law proposes an updating mechanism for wages and pensions on the basis of four Supreme Court rulings. On the one hand, it considered the Sánchez (2005) and Monzo (2006) rulings which index-linked the updating of the historical pensions to the general level of remuneration until March 31, 1995. On the other hand, it took the Badaro ruling, which set the increases from 2002 to 2006 according to the wage index reported by the INDEC national statistics bureau, and the Elliff ruling, which sentenced the salary basis for the initial pension to be updated according to the basic wages of the industry and construction index.

What is new for the social security system with this programme? Not too much. It aims to universalize the index-linking established by justice more than a decade ago. As a supplement, the law also creates the “universal old-age pension”, ensuring coverage for all those over 65 years without previous income via a basic “salary” representing 80 percent of the minimum pension. Once again, what is new for the pension system? And once again, not so much. The idea reminds us of the well-known pension moratoria which have been granted for decades as exceptional measures.

Thinking about this, a daily comparison occurs to me. Those of us who have children see how they learn to follow our steps. First, they repeat our words, later they begin creating their own phrases with the few words they learn and finally they speak fluently using words taken from their family, the media, their friends and the school. For example, I am part of the generation in which our parents taught us to say vaquero but today we say “jean.” And some of this is what I see in the current situation. The actions which have been taken until now look more like an imitation of the past. However, rethinking the social security system implies going beyond. The new law contemplates the creation of a new social security system by 2019. It is necessary to abort the imitation stage to ensure that “the new” not only pretends to be new but really is.