In order for retirements and pensions to have the same value as in September 2017, just 7 years ago, The minimum pension should amount to $441,691 and the maximum amount to $3,235,736.
The difference with current values is abrupt. In September 2024, the minimum pension will be $234,540. And if the $70,000 bonus is maintained, it will rise to $304,540. Meanwhile, the maximum pension will be $1,578,234.
The reference to September 2017 is because from that month onwards it was implemented the change in the pension formula by the government of Mauricio Macri, which ended up affecting all retirees equally.
The formula approved in 2017 was applied with a six-month lag between the date of the data taken for the calculation and the time of the increase. In a scenario of higher inflation, as happened in 2018 and 2019, this accentuated the loss of the real value of assets. This loss was 19.5% between September 2017 and December 2019.
Then, at the end of December 2019, Alberto Fernández suspended that formula and granted increases by decree, harming middle and higher incomesand in 2021, a new formula was launched that affected the middle and high salaries more because the lowest received bonuses. And with Javier Milei, the formula of the previous administration was repealed and A formula is in force based on inflation with a 2-month lag, with the $70,000 bond frozen at the March 2024 value. For example, in September the July CPI is applied, which was 4.03%, but without covering the bond, which would remain at $70,000.
Forward, These losses would remain almost unchanged, because pension benefits are adjusted every month for inflation. This means that Pensions will never recover, even if wages grow and the economy improves. The entire decline in recent years is consolidated by the adjustment for inflation. It may prevent pensions from falling further, but it also prevents them from recovering. And that will be the case for life as long as the current pension formula remains in force.
In September 2017, the minimum amount was $7,247 and the maximum was $53,090.20.
The difference in real terms represents – with the bonus – a loss of minimum income next month of $137,151 (i.e. a 31% drop in purchasing power) and a decline in the maximum income of $1,657,070 (-51%) compared to September 2017.
In other words, The minimum income would have to increase by 45% to achieve the same purchasing power as in September 2017. And more than double the maximum salary.
These losses are end-to-end (September 2024 versus September 2017) to which should be added the month-to-month losses as a result of the fact that salary increases were lower than inflation in most months.
In the case of the minimum retirement, this loss is added to that: The value of the bonus does not form part of the monthly salary and is not taken into account for the calculation and payment of the Christmas bonus, nor for current increases.