The Associated Press reports that Senators voted 46-18 in favor of the nationalization after nearly 12 hours of debate. Congress’ lower house has already approved the bill (See Argentina Pension Nationalism Clears Another Hurdle ), and the President’s signature is considered a “given” since she proposed the move.
President Cristina Kirchner made the proposal in October which calls for all assets in individual accounts to be transferred to the state’s “pay as you go” system and mandatory affiliation to the state system (See Argentina President Moves to Nationalize Pensions ). The move cuts off Argentines’ access to investments that could bring bigger profits, providing them instead with a set amount of money every year from the government, according to the news report.
The proposal prompted a U.S. judge to order the freezing of more than $553 million in U.S. investments held by Argentine pension funds (See Judge Orders Assets in Argentine Pension Funds Frozen ).
Analysts say the change could protect retirees from short-term stock market chaos but also limit their long-term retirement income. Argentine Senate budget commission leader Fabian Rios said the private pension system ”failed” because it was designed for developed economies where citizens can afford large investments in their retirement, according to the news report.
However, critics have called it a “money grab” by the government, which faces huge debt payments and upcoming congressional elections.