Argentine Social Security Reform

The bill approved by the Argentine Congress establishes that social security benefits will be updated quarterly in the months of March, June, September and December of each year.

It also establishes that as of March 2018, the formula used to calculate retirement benefits will be based on:

• 70% on the variations of the General Level of the Argentine Consumer Price Index elaborated by the Argentine Institute of Statistics and Censuses (“Instituto Nacional de Estadística y Censos” or “INDEC”).
• 30% on the coefficient that arises from the variation of the Average Taxable Compensation of Stable Employees (“Remuneración Imponible Promedio de los Trabajadores Estables” or “RIPTE”).

Furthermore, in no case may the amount received by the beneficiary be reduced as a result of the aforementioned formula.

Additionally, the approved bill guarantees the payment of a financial supplement until reaching a pension provision equal to 82% of the Minimum Wage to the beneficiaries of the Universal Basic Benefit who prove 30 years of effective withholdings.

Furthermore, Section 252 of the Labor Contract Law is modified and establishes that as soon as the employee reaches 70 years of age, the employer may request him/her to initiate retirement proceedings, having to maintain the employment relationship until he/she obtains the benefit and for a maximum period of one year. Notwithstanding, the employee may request the pension benefit prior to the completion of 70 years of age, in the case of women as of 60 years of age and in the case of men as of 65 years of age.

Finally, the approved bill establishes that once the employee meets the necessary requirements to access the Universal Basic Benefit, the employer must pay the employee’s withholdings and, with respect to employer contributions, only those for the Argentine Healthcare Providers’ Regime.