The update formula Retirement and pensions Inflation-based inflation leads to significant changes in the structure of public government spending with a lag of two months. In particular, the pension system concentrates a growing share of primary expenditure, while other items lose share. This behavior shows that the adjustment of public finances is based mainly on cuts in certain expenditures and not on a comprehensive change in the functioning of the state.
According to a report by the Argentine Association of Budget and Public Finance (ASAP), Between January and November, spending on retirement and pensions increased by 8.8 percentage points as a share of total primary spending. During this period, pension system participation increased from 36.6% to 45.4%, establishing itself as a major component of national public spending.
This increase occurred parallel to a significant reduction in other budget concepts. According to the same report, energy subsidies fell 40% year-on-year, while transfers to provinces and public sector salaries were also cut. The relative recomposition of pension spending was not due to a sustained real increase in salaries, but rather to the decline in other items and the impact of the mobility formula.
ASAP also warns about the financing situation Pension system. Currently, real funding, understood as that coming from contributions and contributions, only reaches 29% of the total. Consequently, more than 70% of the funds required to pay pensions and pensions are covered by general state revenues, that is, tax revenues.
The weight of the pension system within primary expenditure
The report points out that the sustainability of the system is linked to structural difficulties aging population and the increase in informal work. A previous report cited by ASAP said contributions and contributions accounted for 29.7% of the pension funding structure toward the third quarter of 2025. These data reflect a growing reliance on budgetary resources and continued pressure on public finances.
In this context the Ministry of Economic Affairs analyzes changes under labor reform, which is expected to be debated in February 2026. Initiatives included include the creation of Work Assistance Funds (FAL), a mechanism to facilitate layoffs in the private sector. As announced, these funds would be financed with part of the resources currently allocated to the Argentine Integrated Pension System (SIPA), which would represent an additional reduction in the actual financing of the ANSES.
The impact of pension spending on the budget This is also observed when analyzing its various components. The general distribution system currently explains 23.37% of primary expenditure, compared to 19.9% a year ago. For their part, the benefits granted under the pension moratorium represent 14.9% of primary expenditure, while twelve months previously they were concentrated at 12.9%.
Another relevant component is the so-called “Supplement to retirement provision”which corresponds to the bonus provided for minimum pensions. This approach reduced its contribution to primary expenditure from 3.8% in November 2024 to 2.8% in the same month of 2025. The relative decrease in the bonus within total expenditure reflects that part of the budget adjustment was carried out by liquidating the income of beneficiaries with lower salaries.
What the expenses for retirement and pensions are made up of
From the private sector, various analysts point out that the budget adjustments made in the first years of the administration were estimated at around 38,000 million dollars constant values, This does not mean any structural changes in the functioning of the state. In this sense, they warn that the current composition of spending could change depending on future policy decisions, since no fundamental reforms have been introduced in the pension system or in the administrative structure.
Javier Okseniuk, director of the consulting firm LCG, explained that the proposals from Pension reform The analyzed data would have no direct impact on the budget. According to him, most of these initiatives do not change the mobility formula, but rather focus on fictitious account systems aimed at strengthening the contributory component of the system, combined with guaranteed minimum social protection and reviews of pensions and special schemes.
According to their analysis, the fiscal impact of these types of reforms would only materialize over a time horizon of between 10 and 15 years, limiting their ability to influence fiscal outcomes in the short term. Consequently, the weight of Pension expenses It continues to be determined by the current rules of the system and by the development of inflation.
The evolution of pension purchasing power is another aspect highlighted in the report As quickly as possible. In the penultimate month of the year, September inflation was used as a reference for retirement mobility, which was 3.7%. With this adjustment, the minimum net worth was $333,085. Adding the bonus of $70,000 established by Decree No. 771/2025, the total income amounted to $403,085.
Development of the purchasing power of minimum pensions
ASAP notes that minimum assets recorded a real year-on-year increase of 0.3% during the year. adjusted for inflation. However, the nominal value of the bond has remained unchanged since March 2024, representing a real decrease of 23.8% compared to the previous year. Taking into account the minimum balance plus the bonus, the minimum pension benefit for November resulted in a real year-on-year decline of 4.9%.
If the comparison is made with November 2023, the minimum balance is plus November 2025 bonus represents a real decline of 7.3%. This deterioration is exacerbated as the bond amount remains fixed while inflation continues to rise.
According to the report, this dynamic is gradually bringing the Minimum pension income to the value of the base basket, which was $403,903 per equivalent adult during the period analyzed. The convergence between both values reflects the impact of the delay in the mobility formula and the lack of bonus update.
The behavior of pension spending and its financing are consolidated as one of the biggest challenges Financial policy. The growing participation of pensions in primary expenditure, the dependence on tax resources and the loss of purchasing power of the minimum assets form a scenario that influences short and medium-term budget decisions. In the absence of comprehensive reform, the system remains subject to structural tensions, reflected both in public finances and in the income of beneficiaries.
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