In May,
retirement benefits increase 11% due to the INDEC inflation data
for March, as determined by DNU 274/2024, but the effective increase will depend on
2 key variables: 82% of the Minimum,
Living and Mobile Wage ( SMVM) that sets the income of those who retired with the minimum with 30 or more years of contributions without resorting to moratoriums and
the value and scope of the bonus
that the lowest salaries receive.
We are entering the second half of the month and the Government
has not yet convened
the SMVM Council (it should have been convened in April) and
it remains to be decided
whether the $70,000 bonus will be maintained and at what value, so the increase cannot be calculated for the different segments of retirees and pensioners. .
With the 11% increase in May, retirees and pensioners who fully received the increases (27.18% in March, 27.4% in April and 11% in May)
will accumulate an increase of 79.85% in 5 months.
Those who received bonuses, and if the bonus also receives the 11% increase - about 5 million - the increase as of May would be 66.6%. This is because the minimum asset in May would be $190,124 plus $77,700 of the bonus ($70,000 + 11%) would make a total of
$267,824 versus $160,712 in December 2023.
If the bonus remains at $70,000, the effective increase would not be 11% but 7.8% and the accumulated increase as of May would be 61.9%.
Those who, in addition to the bonus, are entitled to 82% of the SMVM, the calculation is uncertain because it will depend on whether or not the Minimum Wage is increased in May. In April they are charging 2.11% more than in March.
Retired national teachers and university teachers
do not have any increase in April
nor in May because they are governed by a special regime with quarterly increases, in March, June, September and December.
As of March, inflation was 51.6%. With 10.8% in April and 9% in May (estimate from the REM - Survey of Market Expectations of the Central Bank),
inflation in May would total 83.1%.
Consequently, with the new scheme, as of May and with the different levels, retirements – with greater emphasis on the lowest salaries – will continue to lose several points in relation to inflation above the strong loss they had during the governments of Mauricio Macri and Alberto Fernandez.
In June, pensions will be adjusted for April inflation (estimated by the REM at 10.8%), at which time it will be compared with the result produced by the previous Government's formula (salaries plus collection) and the greater increase. It is assumed that due to the recession and the fall in salaries, the increase due to inflation in April, May and June will be higher.
Then, the AF formula ceases to exist and starting in July the increase will depend on the inflation of the previous 2 months. (in July it is adjusted by the May CPI).
According to Jorge Colina, from the consulting firm IDESA, in relation to DNU 274/2024, “the legal objection is that Justice has already said many times that
the mobility formula has to be sanctioned by Congress.
The Executive Branch can make advances in April, May and June - even by simple decree - but the new formula that will be applied starting in July must be made by law. "Justice will have the last word."
And he adds: “from the point of view of retirees, adjusting for inflation stops the real deterioration of pensions, but perpetuates their liquefaction. That is, unless there are extraordinary pension increases in the future, the real value of pensions will be liquefied 10% below the 2023 average.”
Between September 2017 and December 2023, retirements (without the bonus) fell by 55.4%, and due to the bonuses, minimum salaries had a decrease of 26.2%.