ARGENTINA: President Sanctions Pension Reform Bill Into Law

(RTTNews) - Argentina's pension reform bill, which changes the adjustment formula of retirement payments and faced strong opposition both in Congress and in the streets, was turned into law on Thursday.

The new rule states that the adjustment would track both the inflation rate and the changes of a wage index calculated by the Ministry of Labor. Inflation would have a 70% weight, while the remaining 30% would come from the Ministry's index.

The bill also establishes an optional retirement at age 70 and states that those who retire at minimum wage after more than 30 years contributing to the state pension fund should receive 82% of the monthly minimum wage - or 7,265 pesos (US$ 416.82) currently.

Credit rating agency Moody's noted that the pension reform should reduce the disbursements of the government's social security funds by 0.6% of the Gross Domestic Product (GDP) in 2018, putting the South American country on the road to achieving fiscal consolidation.

The final vote on the pension reform in the House of Representatives took 17 hours amid protests and clashes. The bill had 127 favorable votes and 116 votes against it.