Argentina

On January 14, the Argentine government issued a resolution that allows pension fund management companies (AFJPs) to administer the voluntary retirement accounts that were part of the former individual account system. According to the new rules, AFJPs have until February 19 to apply to the National Social Security Administration (ANSES)—the agency in charge of the social insurance system—for permission to administer the voluntary accounts.

Under the old system of individual accounts, any contribution above the worker's mandatory 11 percent of earnings was considered voluntary. When the Argentine government eliminated the system of individual retirement accounts in November 2008, it transferred the assets from the mandatory accounts to the new pay-as-you-go (PAYG) social insurance system. A judge ruled that the voluntary funds belonged to the individual account holders and required ANSES to place them in escrow until a decision was made on how to distribute these funds.
 
Account holders have until March to decide whether to transfer their voluntary accounts from ANSES to an authorized AFJP. At retirement, individuals who have done so will receive a benefit based on their voluntary account balance in addition to their social insurance benefit. The accounts that are not transferred will remain with ANSES and the account balance will be factored into the social insurance benefit. Currently, some 325,000 individuals have voluntary accounts totaling 235 million pesos (US$61.2 million), but most of the accounts have less than 1,000 pesos (US$260).
 
From 1994 until the government shut down the system in November 2008, workers were allowed to choose between the PAYG earnings-related program and an individual account managed by an AFJP. Under the new PAYG system, workers receive a retirement benefit based on PAYG rules and are credited for the years in which they made mandatory contributions to an account managed by an AFJP.
 
 
Article with courtesy of Social Security Online
 
Sources: "Argentina," International Update, December 2008, U.S. Social Security Administration; "Las AFJP Podrán Administrar Aportes de Ex Afiliados," MDZ Diario de Mendoza, el 15 de enero de 2010; "Deben Decidirlo Antes Del 19 De Febrero: Las Ex AFJP Nación y Arauca, Interesadas en Administrar Los Aportes Voluntarios," Clarín, el 16 de enero de 2010; "Habilitan a las AFJP a Tomar Aportes Voluntarios," La Nación, el 16 de enero de 2010.
 
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