Technical design for pension reform

Argentina has more than two hundred different retirement bases at the national, regional, municipal and private levels. In general, subsystems other than SIPA provide a better relationship between effort to contribute during active life and perception of benefits during passive life.

However, in most cases, these discrepancies do not reflect disparate risks in related work activities (strenuous, risky or unhealthy), but rather reflect the ability of these groups to achieve more beneficial rules than those implied by SIPA. These schemes, in general, are not self-financing, because the income from contributions and contributions is not sufficient to pay these differentiated benefits. Therefore, they end up affecting the equity, efficiency, and sustainability of Social Security.

In the future, it is possible to envisage creating a single pension system for citizens and strengthening tools to address some of the differences between the mentioned groups. The joint pension system may be a critical step in eliminating the aforementioned inequalities. Desirable improvements in the replacement rate between retirement and salaries can be financed through voluntary, group and individual savings programs, but without state guarantees, as they increasingly work in other international experiences.

The individual pension system consists of four pillars: the first, non-contributory, aimed at alleviating poverty in old age, which will be the benefit of the current standardized pension system, financed by tax resources; The second pillar will operate as a pay-as-you-go system, aiming to maintain consumption patterns in old age, with an advantage commensurate with the years and social security contributions made during active life; The third and fourth pillars will be voluntary, with the aim of improving the replacement rate, through voluntary collective and individual savings without state guarantees.
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