“Argentina spends 10% of its GDP in retirement and half are special regimes that benefit a few”

Some years ago that the Cippec, the Think Tank that marks Agenda in public policies, has matured a proposal that today debates with the government and the other political forces. Gala Díaz Langou is the executive director of CIPPEC. Warns Clarion that must Acting quickly to an Argentina whose population is aging rapidly.

-Do the moratoriums have logic?

-There we have an access road to the retirement system that is to have 30 years of contributions. Only 24% of the population arrives at that requirement. That is why there are moratoriums. Those who do not arrive do not mean that they have zero contributions, there are 28 years old, there 15 and lose those 15 and 28 years of contributions and end up charging a person who contributed for 28 years that a person who contributed two years in his entire life. There is a very big injustice.

-How does the system think again?

-We live decades ago in a dual work system, where we have almost the same amount of jobs in informality as in formality. That implies universal coverage, that all the people of more than a certain age can retire, because the retirements are ending them paying among all with treasure resources and not so much with the contributions. The system is not sustainable only with contributions, but we can also on that basis recognize every year of contributions. This discretionary cut in 30 years responds to a reality of the labor market that decades in Argentina no longer exists. We have been working with a proposal that is what most countries do, adapting it to the Argentine case and that would imply that the situation would be improved to 80% of retirees to start, because there are many retirees whose situation is affected by the non -recognition of the contributions below 30 years and also would make the system more sustainable.

-That is that the contributions actually made are recognized …

-Yes and strengthen the public distribution system, which is our central proposal and that is why we talk about a reorganization and not of a reform because it does not imply changing another system such as capitalization, but improving what exists, but also working on the exceptions that the regime has. Today in Argentina we spend almost 10% of our GDP in the pension system, half practically, almost 5 points, are exceptions to the regime.

-Then they are not so exceptional ..

-They are more than 200 professions, a very broad and very varied list, there are workers from Río Turbio, the singers of Lyric del Colón, there are teachers, there are presidents and former presidents, there is the diplomatic corps. And those more than 200 regimes are all deficit, except two, university professors and justice. But being deficient do not support only the contributions of workers, which implies that we are also paying those exceptions.

-How are those exceptions?

-They are not only very high retirements. They are mostly exceptions of different nature with regimes in which they retire very early. There are a lot of professions that have retirement ages close to 50 years in a context of population aging and also to stretch life expectancy accompanied by a need and will to continue working. Obviously always respecting the acquired rights, but we must change in a context where very large efforts are being made by the entire population, particularly the most vulnerable sectors, to achieve a macro balance. We have to agree on the objective criteria to justify those exceptions. There we want to reward teachers that it is a profession that contributes to our country with an earlier or higher retirement, but why do you and doctors do not? With what criteria are we going to defend a higher retirement if the salary is still low? It would not be better than in their professional life, teachers win more, more than have a higher retirement.

-How many people cover exceptional regimes?

-There are calculations that say are 200 thousand people and others who are 20% of retirees. You have to make the background transformations we need to have a country that is sustainable in the future. There were great advances in the effort to stabilize the economy, traced mainly by a balance in public finances that was especially anchored in the pension system because it is 80% of the expense, the main component of public spending. And is not assured in the future.

-Argentina allocates 10% of GDP to the pension system, how is it in other comparable countries?

-These 10 points of GDP are comparable to countries that have double in terms of population aging than Argentina. Countries that have a similar population in terms of aging to ours usually spend half, maximum 6, 7 points of GDP. None reaches our levels and that tells us of inefficiencies.

-What calls inefficiencies?

-There are many retirements above the average and there are many people who have more than one benefit. There is a particular case, for example, with the issue of widowhood pensions, which is a law of the early last century, where women were not yet very inserted to the labor market. That obviously changed and also equated. There are pensions for widowhood for men, then a person who is widow at age 20 has for life a pension and if he is a widow again, he has two and they accumulate and are all vital.

-The moratoriums worked as a patch due to high labor informality ..

-In Argentina more than a decade ago we do not create formal employment. The last year was 2011. There were several months last year where we had more jobs in the informal economy than in the formal. I think it is necessary that we think much more creatively what answers we give facing this situation.

-Aquí the bulk of retirees charge the minimum, how is it in other countries?

-Argentina has a virtue in your provisional system and two major problems. The virtue in relation to other countries is that we have a very wide coverage. Almost all of the elderly have a retirement or a pension, either from the public system, of some box, of some exception, or the universal pension for older adults. That covers practically all the people over 65, that does not happen in much of the countries similar to ours. So there we have a virtue that this must be taken care of and it is what makes a relatively low poverty rate in older people.

-What are the two problems?

-On the side, the sustainability of the system is a very expensive system. And the second big problem is the lack of equity. We have benefits that for people who had relatively similar work trajectories, can be radically different for the exceptions we have.

-When they raise it at the government level, do they listen to them?

-For us the ideal scenario would be a law that the Executive sends, because if it is not very likely that this in this context later the Executive if it was not an initiative of them and we believe that there is an opportunity to advance in that sense probably after the elections. But we believe that above all the question of exceptions, the so -called privilege retirements should be a second component in this order, because if we start around it is very possible that the discussion cannot advance, obviously because of the amount of interest. We must act for what is happening in Argentina and we are getting old in a much faster way than other countries. Argentina aged in the last five years, which Europe took 25 years. This means that in relatively little we will have a population of people over 65 who will exceed people of active age working and we also start from a base that is a expensive and inefficient system.