Argentina employment compliance Hub: Employment, Payroll & Tax Guide

Integrated Retirement and Pension System

Title I

General Provisions

CHAPTER I

Creation. Scope of application

Institution of the integrated retirement and pension system

ARTICLE 1 – The Integrated Retirement and Pension System (SIJP) is hereby established with national scope and subject to the regulations of this law, which will cover the contingencies of old age, disability and death and will be integrated into the Single Social Security System (SUSS).

This system consists of: 1) A public pension scheme, based on the granting of benefits by the State that will be financed through a pay-as-you-go system, hereinafter also referred to as the Pay-As-You-Go Scheme, and 2) A pension scheme based on individual capitalization, hereinafter also referred to as the Capitalization Scheme.

Mandatory incorporation

ARTICLE 2 – The following natural persons over eighteen (18) years of age are compulsorily included in the SIJP and subject to the provisions on affiliation established by this law and the regulatory norms that are issued:

a) Persons who perform any of the activities under a dependent relationship listed in the following sections, even if the employment contract or public employment relationship is for a fixed term:

1. Officials, employees and agents who permanently or temporarily hold positions, even if they are of an elective nature, in any of the powers of the national State, its centralized, decentralized or autonomous agencies, State companies, State corporations, public limited companies with majority State participation, mixed economy companies, special account services and social works of the public sector, excluding military personnel of the armed forces and militarized or police-status personnel of the security and police forces.

2. Civilian personnel of the armed forces and of the security and police forces.

3. Officials, employees and agents who permanently or temporarily hold positions in interprovincial official bodies, or bodies made up of the Nation and one or more provinces, whose remuneration is paid with funds from said bodies.

4. Officials, employees and civil agents dependent on provincial governments and municipalities, provided that the respective authorities have previously adhered to the SIJP, through an agreement with the National Executive Branch.

5. Persons who, anywhere in the territory of the country, provide paid services in a permanent, temporary or occasional manner in a dependent relationship in the private sector.

6. Persons who, by virtue of an employment contract entered into or an employment relationship initiated in the Republic, or a transfer or commission arranged by the employer, provide services abroad of the nature provided for in the previous section, provided that such persons had their actual domicile in the country at the time of entering into the contract, the commencement of the employment relationship or the transfer or commission arranged.

7. In general, all persons who, until the validity of this law, were compulsorily included in the national retirement and pension system for activities not included

mandatory in the scheme for self-employed workers.

When dealing with partners in a dependent relationship with companies, the provisions of subsection d shall apply;

b) Persons who, alone or jointly or alternatively with others, associated or not, habitually carry out in the Republic any of the activities listed below, provided that these do not constitute a relationship of dependency:

1. Direction, administration or management of any company, organization, establishment or operation for profit, or commercial or civil company, even if they do not obtain any remuneration, profit or income for these activities.

2. Profession performed by a graduate of a national university or a provincial or private university authorized to operate by the Executive Branch, or by someone who has special legal authorization to practice a regulated university profession.

3. Production or collection of insurance, reinsurance, capitalization, savings, savings and loan, or similar.

4. Any other profit-making activity not included in the preceding sections;

c) Persons serving diplomatic or consular missions and agents accredited in the country, as well as employees of international organizations providing services in the Republic, if, in accordance with current conventions and treaties, Argentine retirement and pension laws are applicable to said personnel. Personnel excluded from this category shall be subject to the provisions of the second paragraph of Article 4;

d) When dealing with partners of companies, for the purposes of their mandatory inclusion in sections a) ob), or both, the following rules will apply:

1. They will not be included in section a):

1.1. The partners of companies of any type whose participation in the capital is equal to or greater than the percentage resulting from dividing the number one hundred (100) by the total number of partners.

1.2. The sole general partner of limited partnerships or limited partnerships by shares. If there is more than one general partner, the provisions of the previous point shall apply, taking into consideration only the general capital.

1.3. The partners of civil companies and irregular or de facto commercial companies, even if the requirement referred to in point 1.1 is not met.

1.4. The partners of companies of any type – even if they are not included in the previous points – when all the members of the company are linked by a kinship bond of up to the second degree of consanguinity and/or affinity.

2. Without prejudice to its inclusion in subsection b), when a partner is mandatorily included in subsection a), the company and the partner will be subject to the obligations of mandatory contributions and payments for the proportion of the remuneration and participation in the profits that the partner receives and/or is credited to his account, to the extent that it exceeds the amount that would have corresponded to him in accordance with his participation in the share capital.

ARTICLE 3.- Joining the SIJP is voluntary for persons over eighteen (18) years of age who are detailed below:

a) With the obligations and benefits corresponding to those included in subsection a) of the previous article:

1. Directors of public limited companies for the allowances they receive in the same company for special remunerated activities that constitute a relationship of dependency.

2. Partners of companies of any type that are not compulsorily included in accordance with the provisions of subparagraph d) of the previous article;

b) With the obligations and benefits corresponding to those included in subsection b) of the previous article:

1. Members of cooperative boards of directors who do not receive any remuneration for those functions, non-managing partners of limited liability companies, trustees of any company and fiduciaries.

2. Owners of condominiums and undivided estates who do not exercise the direction, administration or management of the common operation.

3. Members of the clergy and religious organizations belonging to the Roman Catholic Apostolic faith, or others registered in the National Register of Religious Organizations.

4. Persons who carry out the activities mentioned in Article 2, paragraph b), section 2, and who are therefore required to be affiliated with one or more provincial retirement schemes for professionals, as well as those who practice a non-academic profession authorized prior to the enactment of this law. This inclusion will not modify the obligation arising from the respective local schemes.

5. Housewives.

Exception

ARTICLE 4 – Professionals, researchers, scientists, and technicians contracted abroad to provide services in the country for a period not exceeding two (2) years and on a single occasion are exempt from the SIJP, provided they do not have permanent residency in the Republic and are covered against the contingencies of old age, disability, and death by the laws of their country of nationality or permanent residence. The exemption request must be submitted to the relevant authority by the interested party or their employer.

The preceding exemption will not prevent affiliation to this system, if the contracted party and the employer express their express will in this regard, or if the former makes his own contribution and the corresponding contribution to the employer.

The preceding provisions do not modify those contained in the social security agreements entered into by the Republic with other countries, nor those of Law 17,514.

Simultaneous activities

ARTICLE 5 – The circumstance of also being included in another national, provincial or municipal retirement system, as well as the fact of enjoying any retirement, pension or withdrawal, does not exempt from the obligation to make contributions to this system, except in the cases expressly determined in this law.

Persons who simultaneously carry out more than one activity included in subsections a), b), oc) of article 2, as well as employers where applicable, will be required to contribute for each of them.

Chapter II

Remuneration, contributions and payments

Concept of remuneration

ARTICLE 6 – For the purposes of the SIJP, remuneration is considered to be any income received by the member in cash or in kind susceptible to pecuniary valuation, as remuneration or compensation or by reason of his personal activity, in the form of salary, annual supplementary salary, wages, fees, commissions, participation in profits, authorization, tips, gratuities and additional supplements that have the character of habitual and regular, travel allowances and representation expenses, except for the part actually spent and accredited by means of receipts, and any other remuneration, whatever the name assigned to it, received for ordinary or extraordinary services provided in a dependent relationship.

The implementing authority will determine the conditions under which travel allowances and representation expenses will not be considered subject to contributions or levies, notwithstanding the total or partial absence of receipts that prove the expense.

Tips and in-kind compensation of uncertain value will be estimated by the employer. If the employee disagrees, they may file a complaint with the relevant authority, which will resolve the matter taking into account the nature and type of work and the compensation. Even if the employee agrees, the relevant authority may review the estimate if it deems it does not comply with these guidelines.

Remuneration also includes sums to be distributed to public administration agents or that they receive as:

1. Incentive bonuses, gratuities, or other similar payments. In this case, the contributions will also be the responsibility of the agents, and for this purpose, the corresponding contribution amount must be withheld before distributing these sums.

2. Employee funds or similar, when authorized. In this case, the agency or entity responsible for collecting and distributing these sums must make the corresponding deductions for personal contributions and deposit them within the relevant period.

Excluded concepts

ARTICLE 7 – The following are not considered remuneration: family allowances, compensation arising from the termination of the employment contract, for unused vacation time, and for permanent disability caused by a work-related accident or occupational disease, unemployment benefits, and allowances paid as scholarships. Nor are sums paid as bonuses related to the termination of the employment relationship considered remuneration to the extent that they exceed the annual average of those previously received on a regular and habitual basis.

Taxable income

ARTICLE 8 – Self-employed workers shall make the mandatory social security contributions established in Article 10, based on reference income levels calculated according to categories that will be established by the regulatory rules in accordance with the following guidelines:

a) Taxpaying capacity;

b) Whether or not they are subject to value added tax and, if applicable, whether they are registered, unregistered or not responsible for said tax.

Taxable base

ARTICLE 9 – For the purposes of calculating the contributions and payments corresponding to the SIJP, the remunerations may not be less than the amount equivalent to three (3) times the value of the Mandatory Average Pension Contribution (AMPO), defined in article 21. In turn, the aforementioned pension taxable base will have a maximum limit equivalent to twenty (20) times the aforementioned minimum.

If a worker simultaneously receives more than one remuneration or income as an employee or self-employed worker, each remuneration or income will be counted separately for the purposes of the limits established in the preceding paragraph. Depending on the specific characteristics of certain employment activities, regulations may establish exceptions to the provisions of this paragraph.

Mandatory contributions and payments

ARTICLE 10. – The mandatory contributions to the SIJP will be calculated based on the reference salaries and income, and will be as follows:

a) Personal contribution of employees in a dependent relationship included in this system;

b) Contribution payable by employers;

c) Personal contribution of self-employed workers included in this system.

Percentage of contributions and payments

ARTICLE 11. – The personal contribution of employees in dependent employment will be eleven percent (11%), and the contribution of employers will be sixteen percent (16%).

The personal contribution of self-employed workers will be twenty-seven percent (27%).

Mandatory contributions will be paid through the SUSS. To this end, they must be declared and paid by the self-employed worker or by the employer in their dual capacity as withholding agent for employee contributions and as contributor to the SIJP, as applicable, within the timeframes and according to the procedures established by the implementing authority.

Chapter III

Obligations of employers, affiliates and beneficiaries

Employer obligations

ARTICLE 12. – The obligations of employers, without prejudice to the other obligations established in this law, are:

a) Register as such with the enforcement authority and notify it of any changes in their status as employers, within the time limits and in the manner established by said authority;

b) Report to the enforcement authority any staff losses;

c) Make the corresponding personal contribution deductions from the remuneration, and deposit them to the order of SUSS;

d) Deposit the contributions under your responsibility in the same manner as indicated in the previous paragraph;

e) Submit to the enforcement authority the payrolls and contributions corresponding to the staff;

f) Provide all reports and display the supporting documents that the enforcement authority requires in the exercise of its powers, and allow the inspections, investigations, verifications and checks that it orders in the workplaces, books, notes, papers and documents.

g) To provide members and beneficiaries and their dependents, when requested, and in any case upon termination of the employment relationship, with certifications of services rendered, remuneration received and contributions withheld, and all other documentation necessary for the recognition of services or the granting of any benefit;

h) Require workers included in the SIJP, at the beginning of the employment relationship, within the time limits and with the modalities established by the application authority, to submit a written sworn statement of whether or not they are beneficiaries of retirement, pension, withdrawal or non-contributory benefit, indicating, if affirmative, the granting body and data of individualization of the benefit;

i) Report to the enforcement authority any fact or circumstance concerning workers that affects or may affect compliance with the obligations imposed on them and on employers by national social security laws;

j) In general, to comply in a timely manner with the other provisions established by this law, or that the enforcement authority may order.

The departments and agencies of the State mentioned in section 1 of subsection a) of article 2, are also subject to the obligations listed above.

Obligations of members and beneficiaries

ARTICLE 13. –

a) The obligations of members in a dependent relationship, without prejudice to the others established in this law, are:

1. Provide the reports required by the enforcement authority, regarding your status with respect to social security laws.

2. Submit to the employer the sworn statement referred to in subsection h) of article 12, and update it when they acquire the status of beneficiaries of retirement, pension, withdrawal or non-contributory benefit, within the period and with the modalities established by the application authority.

3. Report to the enforcement authority any fact or circumstance that constitutes non-compliance by the employer with the obligations established by the national retirement and pension laws.

The enforcement authority, within a period not exceeding 45 days, must investigate the reported facts, issue a resolution dismissing the complaint or imposing the pertinent sanctions, and file the corresponding criminal complaint, as appropriate, and duly notify the complainant of all actions taken and decisions made. Any public official who fails to comply with the obligations established in this section will be guilty of a serious offense.

b) The obligations of self-employed members, without prejudice to the other obligations established in this law, are:

1. Deposit the contribution to the order of SUSS.

2. To provide all reports regarding their situation with respect to social security laws and to show the receipts and supporting documents that the enforcement authority requires in the exercise of its powers, and to allow the inspections, investigations, verifications and checks that it orders in the workplaces, books, notes, papers and documents.

3. In general, to comply in a timely manner with the other provisions established by this law, or that the enforcement authority may order;

c) The obligations of the beneficiaries, without prejudice to the other obligations established in this law, are:

1. Provide the reports required by the enforcement authority, regarding your status with respect to social security laws.

2. To communicate to the enforcement authority any situation provided for by the legal provisions, which affects or may affect the right to receive the total or partial benefit they enjoy.

3. Submit the corresponding sworn statement to the employer if they return to work.

If the beneficiary is incapacitated, the fulfillment of the obligations established above falls to his legal representative.

If there is a total or partial incompatibility between receiving the benefit and performing the activity, and the beneficiary fails to report this circumstance, the benefit payment will be suspended or reduced, as appropriate, from the moment the implementing authority becomes aware of it. The beneficiary must also reimburse the amount unduly received as pension benefits, with the corresponding surcharges, which will be fully deducted from the benefit they are entitled to receive if they continue working; otherwise, they will be charged in accordance with subsection (d) of Article 14.

An employer who, knowing that a beneficiary is in violation of the rules on incompatibility, fails to report this circumstance to the enforcement authority, shall be subject to a fine equivalent to ten (10) times the amount unduly received by the beneficiary as pension benefits. The fact that the employer does not withhold contributions creates a presumption, when the employee is a beneficiary of pension benefits, that the employer was aware of the aforementioned circumstance.

Chapter IV

Features

Features

ARTICLE 14 – The benefits agreed upon by the SIJP have the following characteristics:

a) They are highly personal, and only belong to their holders;

b) They cannot be alienated or assigned to third parties by any right, except for the benefits mentioned in subsections a) and b) of article 17, which, with the prior formal and express consent of the beneficiaries, may be assigned in favor of public bodies, trade union associations of workers with trade union status, employers’ associations, social works, cooperatives and mutuals, with which the beneficiaries agree to the advance of the benefits;

c) They are exempt from seizure, with the exception of alimony payments and litigation expenses;

d) Benefits under the Pay-As-You-Go Scheme are subject to deductions ordered by the competent judicial and administrative authorities for charges arising from credits in favor of social security agencies or for the improper receipt of retirement, pension, or non-contributory benefits. These deductions may not exceed twenty percent (20%) of the monthly benefit amount, except when, due to the duration of the benefit, it is not possible to settle the charge using that percentage, in which case the debt will be prorated according to that duration;

e) They are imprescriptible, except for those established in article 17, which will be governed by the rules of article 82 of law 18.037 (consolidated text 1976);

f) They are only extinguished for the reasons provided for by law.

Any legal act that contravenes the provisions above shall be null and void.

Reopening of proceedings. Nullity

ARTICLE 15. – When a final judicial or administrative decision has been issued denying, in whole or in part, the content of that decision shall prevail. If, as a result of the reopening of the proceedings in response to new claims, the recognition of this right is granted, the date of the request for reopening the proceedings shall be considered the date of the application.

When the resolution granting the benefit is affected by absolute nullity resulting from facts or acts reliably proven, it may be suspended, revoked, modified or replaced for reasons of illegitimacy in administrative proceedings, by means of a reasoned resolution, even if the benefit is in the process of being paid.

TITLE II

Public pension system

Chapter I Guarantee. Financing Benefits

State Guarantee.

ARTICLE 16. – The national State guarantees the granting of the benefits established in this title, which will be financed through a pay-as-you-go system.

Benefits

ARTICLE 17.- The system established in this title shall grant the following benefits:

a) Universal basic benefit;

b) Compensatory benefit;

c) Disability retirement;

d) Survivor’s pension;

e) Additional benefit for continued employment.

Financing

ARTICLE 18.- The benefits corresponding to the pay-as-you-go system will be financed through funds from:

a) The contributions payable by employers, as set out in Article 11;

b) Sixteen (16) points out of the twenty-seven (27) corresponding to the contributions of self-employed workers; established in article 11;

c) The collection of the Tax on Personal Assets not incorporated into the Economic Process and other taxes specifically allocated to the national social security system or to this system;

d) Resources from the Nation’s ‘General Revenues’;

e) Interest, fines and surcharges;

f) Income from investments;

g) Any other resource that corresponds to entering the distribution system;

h) The contributions corresponding to the members provided for in article 30 who have not exercised the option provided for in article 39.

Chapter II

Universal basic benefit

Requirements

ARTICLE 19. – The following members shall be entitled to the basic universal benefit (PBU) and the other benefits established by this law:

a) Men who have reached sixty-five (65) years of age;

b) Women who have reached sixty (60) years of age;

c) Accredit thirty (30) years of service with computable contributions in one or more regimes included in the reciprocity system.

In any of the regimes provided for in this law, women may choose to continue their work activity until sixty-five (65) years of age; in this case the scale of article 128 will apply.

For the sole purpose of proving the minimum services necessary to achieve the basic universal service, excess age may be compensated with a lack of services, in the proportion of two (2) years of excess age for one (1) year of missing services.

For the purposes of fulfilling the requirements set out above, the provisions of Articles 37 and 38 shall apply, respectively.

Benefit

ARTICLE 20. – The monthly amount of the Basic Universal Benefit will be determined in accordance with the following rules:

a) For beneficiaries who prove thirty (30) years of service under the conditions of subsection c) of the previous article, the benefit will be equivalent to two and a half (2.5) times the average mandatory pension contribution, referred to in the following article;

b) For beneficiaries who prove more than thirty (30) and up to a maximum of forty-five (45) years of service under the aforementioned conditions, the benefit will be increased by one percent (1%) per additional year on the sum referred to in subsection a).

Mandatory average pension contributions

ARTICLE 21. – The Mandatory Average Pension Contribution (AMPO) will be obtained by dividing the monthly average of the contributions established in article

39, entered in each semester, excluding contributions on supplementary annual salary, by the total average monthly number of members who are contributing, in accordance with the procedure established by the regulatory rules.

The AMPO calculation will be carried out in the months of March and September of each year.

Computing of services

ARTICLE 22. – For the purposes of Article 19, paragraph c), the services included in this system, as well as those provided previously, shall be counted. This calculation shall exclusively include the activities carried out up to the time of requesting the basic universal benefit.

Chapter III

Compensatory benefit

Requirements

ARTICLE 23. – The following members shall be entitled to the compensatory benefit:

a) Demonstrate that they meet the requirements to access the basic universal benefit;

b) Provide proof of services with contributions included in the retirement reciprocity system, provided up to the effective date of this book;

c) They are not receiving disability retirement benefits, regardless of the granting system.

Benefit

ARTICLE 24. – The monthly compensatory benefit amount will be determined in accordance with the following rules:

a) If all credited service periods were under an employment relationship, the benefit shall be equivalent to one and a half percent (1.5%) for each year of credited service, or fraction thereof greater than six (6) months, up to a maximum of thirty-five (35) years, calculated on the average of the remunerations subject to contributions, updated and received during the ten (10) year period immediately preceding the cessation of service. The regulations shall establish the procedures for calculating the corresponding average.

In order to implement the update provided for in the preceding paragraph, the National Social Security Administration (ANSES) will regulate the application of the salary index to be used. This index will be official;

b) If all services with computed contributions are self-employed, the benefit will be equivalent to one and a half percent (1.5%) for each year of services with contributions, or fraction greater than six (6) months, up to a maximum of thirty-five (35) years, calculated on the monthly average of the updated amounts of the categories in which the member was registered, weighted by the time with computed contributions in each of them;

c) If service periods with contributions under an employment relationship and self-employment are computed successively or simultaneously, the benefit will be established by adding the amount resulting from employment-related service and the amount corresponding to self-employment service, both in proportion to the time computed for each type of service. If the computed period exceeds thirty-five (35) years, for the purposes of this subsection, the thirty-five (35) most favorable years will be considered.

To determine the amount of the benefit, only services indicated in subsection b) of the previous article will be taken into account.

Average remuneration

ARTICLE 25. – To establish the average remuneration, the annual supplementary salary and the amounts that, by virtue of the provisions of the second paragraph of Article 9, exceed the maximum set in the first paragraph of the same article, will not be considered.

To have maximum

ARTICLE 26. – The maximum amount of the compensatory benefit will be equivalent to one (1) time the AMO for each year of service with credited contributions.

Chapter IV

Disability retirement benefits and survivor’s pension benefits

Applicable rules

ARTICLE 27. The Public Pension System will be responsible for disability retirement benefits and survivor’s pensions for active members up to the sum of the Basic Universal Benefit plus the Compensatory Benefit that corresponds at the time of the contingency.

The pension for the death of the beneficiary of any of the benefits mentioned in sections a), b) and c) of article 17 will also be under the responsibility of this system.

The benefits indicated in the preceding paragraphs will be governed for their granting by the same requirements established for said benefits by the Capitalization Regime.

The calculation of the Basic Universal Benefit will be carried out in accordance with article 20, paragraph a), considering as years of service the sum of the years of service with contributions prior to disability or death plus the future years up to the age established in article 19, paragraphs a) and b), or that established in article 37, if applicable.

In no case shall the benefit established in this article exceed the amount of benefits established in article 28.

The regulatory rules will establish the procedure to be followed related to the determination of disability in the case of members who have exercised the option for the pay-as-you-go system, which must be compatible, where relevant, with the provisions of Chapter II of Title III.

The disability or death benefits to be granted to beneficiaries who choose to remain in the pay-as-you-go system will be equivalent to those established in articles 97 and 98.

Benefits

ARTICLE 28. – The amount of the benefits mentioned in the previous article shall be determined in accordance with the following rules:

a) Disability retirement, as established in article 97;

b) The pension for the death of an active member, as established in section 2 of article 98;

c) The pension for the death of the beneficiary, established in the second paragraph of the previous article, according to the provisions of section 3 of article 98.

Payment of benefits

ARTICLE 29 – The benefits indicated in the first paragraph of article 27, and the pension derived from the benefit mentioned in subsection c) of article 17, will be paid to the beneficiaries directly by the SUSS.

Members’ option

ARTICLE 30. Additional benefit for continued employment: Individuals covered by Article 2 may choose not to be included in the provisions established in Title III of this book. The regulations will establish the administrative procedures for exercising this option.

The aforementioned option will produce the following effects for members:

a) The contributions established in article 39 will be allocated to the financing of the public pension system;

b) Members shall be entitled to receive from the public system an additional benefit for continued service, which shall be added to the benefits established in subsections a) and b) of Article 17. The monthly amount of this benefit shall be determined by calculating eighty-five hundredths of one percent (0.85%) for each year of service with contributions made to the SIJP in the same manner and methodology as that established for the compensatory benefit. To access the additional benefit for continued service, members must meet the requirements established in subsections a) and c) of Article 23;

c) Disability retirement benefits and death pensions for active members will be financed by the pay-as-you-go system in accordance with the provisions of Title III of Chapter VII, regardless of the member’s date of birth.

d) For the purposes of mobility aspects, supplementary annual benefit and others inherent to the additional benefit for permanence, this is comparable to the provisions established for the compensatory benefit.

Chapter V

Common provisions

Supplementary annual benefit

ARTICLE 31. – A supplementary annual benefit will be paid, payable in two (2) installments, each equivalent to fifty percent (50%) of the benefits mentioned in article 17, in the months of June and December.

When the right to enjoy the benefits has been exercised only for part of a semester, the respective amount will be determined in proportion to the time in which the benefits were accrued.

Mobility of benefits

ARTICLE 32. – The benefits corresponding to the Pay-As-You-Go System

They will be mobile, based on the variations between two (2) consecutive estimates of the AMPO, and this cannot imply in any way the decrease in nominal terms of the respective benefit.

Accumulation limit

ARTICLE 33. – The same person may not be entitled to more than one (1) basic universal benefit and, if applicable, more than one (1) compensatory benefit, nor more than one (1) additional benefit for permanence, and must choose one of them.

Incompatibility – Exception for university teaching staff

ARTICLE 34. – If the beneficiary of a basic universal benefit returns to employment, the enjoyment of that benefit, as well as the compensatory benefit and the additional benefit for permanence if applicable, will be suspended until the cessation of said activity, which will not give the right to readjustment of the amount of the aforementioned benefits.

The provisions of the preceding paragraph do not apply to beneficiaries who return to work or continue in teaching or research positions at national universities or at provincial or private universities authorized to operate by the Executive Branch, or in faculties, schools, departments, institutes and other establishments at the university level that depend on them.

The Executive Branch may extend this compatibility to teaching or scientific research positions held in other official establishments or institutes at the university, scientific or research level, as well as establish, in the cases contemplated in this paragraph and the previous one, limits of compatibility, with a reduction of the benefits.

Unified perception

ARTICLE 35. – The basic universal benefit and the compensatory benefit shall be paid in coordination with the ordinary retirement pension or with some of the benefits detailed in Article 27 granted through the Capitalization System. The implementing regulations shall establish the transfer mechanisms from the Unified Social Security System to the entity responsible for paying the benefit derived from the Capitalization System, in order to ensure the immediacy and simultaneity of the respective payments.

Chapter VI

Implementing, monitoring and control authority

Powers and duties

ARTICLE 36.- ANSES will be in charge of the application, control and oversight of the Distribution System, as well as the collection of the Single Social Security Contribution (SUSS), which in addition to the concepts that constitute resources of the Distribution System, will include the personal contribution of the workers, which will be directed to the Capitalization System.

The aforementioned body will be responsible for issuing regulations regarding the following items:

a) The methods of collecting pension contributions and payments, which must be made by those obligated to pay, in entities governed by Law 21,526 in accordance with the manner established by the regulatory rules;

b) The transfer of the corresponding pension contributions to the pension fund administrators, with the receiving banking entities having to send them directly to the corresponding administrators within 48 hours of receipt, and send the information of the transfers made to ANSES within the following 48 hours;

c) Monitoring compliance with social security obligations;

d) The determination of default and punitive interest and sanctions applied in case of default;

e) Setting the dates for declaring and paying contributions;

f) Certification of the requirements necessary to access the benefits established in this title;

g) The implementation of rules and procedures to comply with the provisions of Article 35;

h) The requirement of all periodic or occasional information from those responsible for the declaration and payment of contributions and payments, necessary for the proper fulfillment of their control functions;

i) The granting of the benefits established in this title;

j) The procedure for processing complaints referred to in paragraph 3 of subparagraph a) of Article 13.

In the exercise of its powers, it may request the assistance of the public force, initiate legal actions, report crimes and become a plaintiff.

This list is merely illustrative, and the aforementioned body may perform all those unspecified functions that are necessary for the normal exercise of its powers of administration of the Single Social Security System.

Chapter VII

Transitional provisions

Age gradualism

ARTICLE 37. – The age established in article 19, paragraph b) for the achievement of the basic universal benefit, will be applied according to the following scale:

              MEN WOMEN Since the year List of Self-Employed Workers List of Self-Employed Workers     
                Dependency Dependency                    

     1998 64 65 59 60         

     2001 65 65 60 60         

     2003 65 65 60         

     60 2005 65 65 60 60         

     2007 65 65 60 60         

     2009 65 65 60 60         

     2011 65 65 60 60        

Sworn statement of services with contributions

ARTICLE 38. – For the calculation of the years of service with contributions required by article 19 to achieve the basic universal benefit, only the maximum number of years indicated below may be accredited by sworn statement, according to the year of termination of the affiliate:

         1994 7 years             

         1995 7 years            

         1996 6 years            

         1997 6 years            

         1998 5 years            

         1999            

         5 years 2000            

         4 years            

         2001 4 years 2002            

         3 years 2003            

         3 years            

         2004 2 years 2005 2 years            

         2006 1 year            

         2007 1 year           

TITLE III

Capitalization Regime Chapter I – General Provisions Financing

ARTICLE 39. – The personal contributions of employees in dependent relationships established in article 11, and eleven (11) points of the twenty-seven (27) corresponding to the contributions of self-employed workers, who have not exercised the option provided for in article 30, will be allocated to the capitalization system.

Entities receiving the contributions

ARTICLE 40.- The capitalization of contributions intended for this system will be carried out by corporations called Pension and Retirement Fund Administrators (AFJP), hereinafter also administrators, which will be subject to the requirements, rules and control provided for in this law and its regulatory rules.

Likewise, provincial states, the Municipality of the City of Buenos Aires, other companies, entities or associations of various nature – with or without profit motives – that are established with this exclusive purpose may be constituted as administrators, which without prejudice to adopting a different legal figure, will be subject to identical requirements, rules and controls.

All administrators, regardless of their legal structure, will be subject to the direct control and supervision of the Superintendency of Pension Fund Administrators established by Article 117 of this law; this is without prejudice to any oversight that may be exercised by the various relevant supervisory bodies, according to their legal form. These bodies must act without interfering with the specific functions of the aforementioned Superintendency, whose regulations will be mandatory for the administrators.

All regulations that prevent professional associations of workers or employers, mutuals, cooperatives, public professional associations that freely practice their profession and any other non-state public law entity whose main purpose is to attend to social security, from forming or participating as shareholders of a pension fund administrator are hereby repealed.

It is hereby ordered that the Banco de la Nación Argentina shall, without prejudice to the activities permitted by its Organic Charter, carry out the activity of managing retirement and pension funds, and shall adapt its structure accordingly within thirty (30) days of the promulgation of this law.

Add to Article 3 of Law 21.799:

Inc. g): Manage retirement and pension funds and the insurance activity exclusively inherent to this purpose, complying with the relevant provisions of Law 20.091 and submitting to its control body.

The AFJP thus constituted will be under the direct control and supervision of the Superintendency of Pension Fund Administrators, being subject to the same requirements, rules and controls that govern the rest of the AFJPs.

The National State guarantees to the members of the AFJP created in the second part of this article that the deposited contribution, after deducting exclusively the first amounts of the insurance provided for in art. 99 of this document, will in no case be less than the greater of the following alternatives:

a) The amounts deposited in pesos plus an interest rate accrued by the Banco de la Nación Argentina on its savings accounts for deposits in pesos;

b) The amounts deposited in pesos converted to US dollars at the corresponding buying exchange rate at the close of operations of the Banco de la Nación Argentina on the day each deposit is made, plus the LIBO rate for 90-day deposits.

This Administrator of the Argentine Nation Bank will direct no less than twenty percent (20%) of the contributions that constitute its fund to loans or investments destined for regional economies under the conditions set by the regulations.

Private sector-managed pension funds (AFJPs) may provide guarantees at their own cost and risk.

Election of the administrator

ARTICLE 41. – Every person who joins the capitalization system must individually and freely choose an administrator, which will capitalize in its respective retirement and pension fund the contributions established in Article 39 and the deposits and contributions referred to in Articles 56 and 57. The freedom to choose the administrator may not be affected by any mechanism or agreement, and it is prohibited to condition the granting of benefits on the worker’s affiliation with or change of administrator. Any contractual agreement in this regard will be absolutely null and void, without affecting the benefit granted.

The member must join a single administrator even if he provides services for several employers or simultaneously performs tasks as a dependent worker and as a self-employed worker.

Administrator’s obligations regarding incorporation

ARTICLE 42. – The administrators may not reject the incorporation of an affiliate made in accordance with the rules of this law nor make any discrimination between them, except those expressly contemplated herein.

The administrators must send the employer a copy of the application for incorporation or transfer of each employee in a dependent relationship.

Obligations of the affiliate and the employer

ARTICLE 43. – The employee in a dependent relationship must inform his employer of the administrator in which he is incorporated or decides to incorporate, within the term of thirty (30) calendar days after the start of the employment relationship or the option exercised in accordance with the provisions of article 30.

If the affiliate omits notification and the employer has not received communication from any administrator regarding the incorporation of the employee, the contributions destined for this regime must be made effective indicating as administrator the one in which the majority of its employees are incorporated.

Right of transfer to another administrator

ARTICLE 44. – Any member or beneficiary who meets the requirements of Article 45 has the right to change their pension fund administrator, for which they must provide formal notification to the administrator in which they are currently enrolled and, if applicable, to their employer. The change will take effect from the second month following the request and will be subject to the provisions of the applicable regulations.

Conditions for the transfer

ARTICLE 45. – The right of transfer by the affiliate or beneficiary will be limited to two (2) times per calendar year and will be governed by the following rules:

a) In the case of members, the transfer may be carried out as long as they have registered at least four (4) months of contributions in the entity they are leaving;

b) In the case of beneficiaries under the modalities established in subsections b) oc) of article 100, the transfer may be carried out provided that the beneficiary registers at least four (4) collections in the entity that he/she is leaving;

c) In the case of beneficiaries who are receiving temporary disability retirement benefits, the right to transfer administrators may not be exercised while they receive the corresponding benefit.

Chapter II

Benefits

ARTICLE 46. – The system established in this title shall grant the following benefits:

a) Ordinary retirement;

b) Disability retirement;

c) Pension for the death of the member or beneficiary.

These benefits will be financed through the individual capitalization of pension contributions allocated to this system.

Ordinary retirement

ARTICLE 47. – Male members who have reached sixty-five (65) years of age and female members who have reached sixty (60) years of age shall be entitled to ordinary retirement, with the exception of the provisions of article 128 and without prejudice to the provisions of article 110.

If a member remains active after the date on which he or she reaches the age established to access the ordinary retirement benefit, the provisions of article 111 will apply.

Disability retirement

ARTICLE 48. – Members who meet the following conditions shall be entitled to disability retirement:

a) They become totally physically or intellectually incapacitated for any reason. Incapacity is presumed to be total when the disability produces a reduction of sixty-six percent (66%) or more in their work capacity; social or earnings disabilities are excluded;

b) They have not reached the age established to access ordinary retirement nor are they receiving early retirement.

The determination of the reduction in the affiliate’s work capacity will be established by a medical commission whose opinion must be technically sound, in accordance with the procedures established in this law and those provided for in the regulatory decree of this law.

Temporary total disability that only produces a verified or probable incapacity that does not exceed the time in which the affiliate in a dependent relationship is entitled to receive remuneration or other substitute benefit, or one (1) year in the case of the self-employed affiliate, does not entitle one to the benefit.

Temporary ruling on disability

ARTICLE 49. –

1. Application.

The member who is included in the situation indicated in subsection b) of article 48 and who considers himself to be included in the situation described in subsection a) of the same article, may request retirement due to disability before the administrator to which he is incorporated.

To make such a request, the member must prove their identity, declare their real address, attach the studies, diagnoses and medical certifications they possess, which must be formulated and signed exclusively by the member’s attending physicians, detailing the physicians who treated or currently treat them, if known, as well as the documentation that proves the levels of formal education achieved, if they possess it, and failing that, a sworn statement on the level of formal education achieved.

The administrator may not require any information or documentation other than that described to process the request. At the time of submission, the administrator must verify whether the member is already enrolled.

If the verification is negative, the application will be rejected, and the certificate issued by the administrator will serve as sufficient justification for the decision. A duplicate of the same information will be given to the applicant. If the verification is positive, the administrator must forward it within 48 hours to the medical commission with jurisdiction over the member’s actual address. In accordance with the provisions of Article 91 in fine, the administrator must send a copy of the member’s application to the ANSES office designated by the regulations.

2. Proceedings before medical commissions

The medical commission will analyze the background information and will reliably summon the member to their reported real address for a review, which must be carried out within fifteen (15) calendar days of the request being made.

If the member does not attend the summons, the proceedings will be reserved until he appears.

If the member complies with the summons or appears subsequently, a complete psychodiagnostic will first be carried out; the report must contain in its conclusions the member’s aptitudes to be trained in the performance of tasks in accordance with his psychophysical disability.

Likewise, if the medical commission deems it appropriate, it may request the collaboration of medical specialists in the condition suffered by the member.

If, based on the information provided by the member and the examination performed by the doctors, they are unable to make a determination, the medical commission must at that same time: a) Indicate the necessary diagnostic studies that must be performed on the member; b) Arrange with the professionals who will perform them, the place, date and time at which the member must attend to have them performed; c) Issue the corresponding orders; d) Deliver said orders to the member with the pertinent instructions; e) Set a new date and time for a second examination of the member; and f) Record the actions taken in a document that will be signed by the member and the doctors designated by the interested parties, if they attend.

The supplementary studies will be free of charge for the member and covered by the medical commission, as will the member’s transportation costs for undergoing the supplementary studies and attending appointments with the medical commission, when the member is unable to travel independently. These expenses will be financed in accordance with the provisions of Article 51. The member may have the requested studies, and any others they deem relevant to submit to the medical commission, performed by professionals of their choosing, but at their own expense. This does not relieve them of the obligation to undergo the studies as indicated by the medical commission.

If the member does not appear before the medical commission for the second examination or does so without the complementary studies

requested by the same, the proceedings will be reserved until it is presented again with said studies, in which case a new review date will be set within the following ten (10) calendar days.

If the member appears before the medical commission with the requested supplementary studies, the medical commission, within the following ten (10) days, must issue a ruling considering whether or not the requirements established in subsection a) of article 48 have been verified, in accordance with the rules referred to in article 52. This ruling must be reliably notified within three (3) calendar days to the member, to the administrator to which the member is incorporated, to the life insurance company with which the administrator has contracted the insurance provided for in article 99 or to ANSES in the cases of article 91 in fine.

If the medical commission determines that the member meets these requirements, the worker will be entitled to temporary disability retirement from the date the disability is declared. In this case, the medical report must specify the psychophysical rehabilitation and job retraining treatment that the member must undergo. This treatment will be free of charge for the member, and if the member refuses to comply regularly, they will receive seventy percent (70%) of their retirement benefit.

If there are proven curative medical treatments for the disabling condition(s) of the member, the medical commission will prescribe them. If the member refuses to undergo these treatments or fails to complete them without just cause, their temporary disability pension will be suspended. These treatments will also be free of charge for the member.

If the medical commission does not issue a ruling within the stipulated period, the member will be entitled to temporary disability retirement until the medical commission issues its ruling.

The member, the administrator to which they are affiliated, the life insurance company with which the administrator has contracted the insurance provided for in Article 99, and ANSES (National Social Security Administration) may appoint a physician to be present and participate during the proceedings conducted by the medical commission to evaluate the member’s disability. The fees incurred by these physicians will be borne by the appointing parties. These professionals will have the right to be heard by the medical commission, to present the diagnostic studies they have conducted at their own expense, and a summary of their statements will be recorded in the minutes, which they must sign, assuming responsibility for their statements and opinions. However, they may not raise any objections to the processing of the case file.

The medical commission will report all actions taken to the administrator in which the member is incorporated, to their insurer and to ANSES.

3. Action before the central medical commission

The decisions issued by the medical commissions may be appealed to a central medical commission by: a) The member; b) The administrator to which the member is affiliated; c) The life insurance company with which the administrator has contracted the insurance established in Article 99; and d) ANSES. To do so, it will suffice to submit a presentation within five (5) days of notification of the decision, stating that the notified resolution is being appealed.

Regarding the procedures and deadlines for action at this stage, the provisions of the procedure established for medical commissions apply in full, setting a deadline of 48 hours from the end of the appeal period, for the medical commission to send the proceedings to the central medical commission.

4. Procedure before the National Social Security Chamber

The resolutions of the central medical commission may be appealed to the National Social Security Chamber by the persons indicated in point 3 of this article and in accordance with the procedures established therein.

The central medical commission will submit the proceedings to the Chamber within 48 hours of the deadline for filing the appeal.

The Chamber shall issue its decision within forty-five (45) days of receiving the proceedings from the central medical commission, in accordance with the following procedure: a) Immediately upon receiving the proceedings, it shall give the forensic medical body ten (10) days to provide its opinion on the degree of disability of the affiliate in accordance with subsection a) of article 48, and in accordance with the rules referred to in article 52; b) In exceptional and sufficiently justified cases, the forensic medical body may subject the affiliate to a new medical review and request new complementary studies, which must be completed within ten (10) days; c) The opinion of the forensic medical body shall be given to the appellant and the affiliate, for a period of five (5) days so that they may argue on the merits of the proceedings and evidence produced; d) Once this period has expired, the Chamber shall issue a judgment within the following ten (10) days.

The fees and expenses incurred by the appeal before the National Social Security Chamber will be borne by the losing appellant.

5. Effect of appeals

Appeals in these proceedings will have suspensive effect.

6. Fund for psychophysical rehabilitation treatments and job retraining

A fund is created for psychophysical rehabilitation treatments and job retraining, made up of the resources determined for this purpose by the National Executive Branch, and thirty percent (30%) of the temporary disability retirement benefit that will be deducted from members who do not regularly comply with the rehabilitation or job retraining treatments prescribed by the medical commission.

This fund will be administered by the National Institute of Social Services for Retirees and Pensioners and used exclusively to organize programs to implement treatments prescribed by medical commissions.

Notwithstanding the foregoing, life insurance companies may, with the authorization of the corresponding medical commission, substitute or supplement the indicated treatment with another or others at their sole expense.

Final ruling on disability

ARTICLE 50 – Professionals and institutes that carry out psychophysical rehabilitation and job retraining treatments must report, within the time limits established by the regulatory norms, the evolution of the affiliate to the medical commissions.

When the medical commission, in accordance with the reports received, deems the member rehabilitated, it will summon the member through the administrator and issue a final ruling revoking the right to temporary disability retirement. After three (3) years from the date of the temporary ruling, the medical commission must summon the member through the administrator and issue the final disability ruling, either confirming the right to permanent disability retirement or revoking it entirely, in accordance with the requirements established in subsection a) of Article 48 and the regulations referred to in Article 52. This period may be exceptionally extended for two (2) more years if the medical commission considers that the member can be rehabilitated within that period.

The final ruling may be appealed by the same persons and under the same procedures and deadlines as those established for the provisional ruling.

Medical Commissions. Integration and Financing

ARTICLE 51.- The medical commissions and the Central Medical Commission shall be composed of three (3) physicians who shall be appointed through a competitive public examination based on qualifications and experience by the Superintendency of Pension Fund Administrators. They shall have the collaboration of the necessary professional, technical, and administrative staff.

The expenses required for the operation of the aforementioned commissions will be financed jointly by the administrators, in proportion to the number of members requesting disability retirement benefits from each of them. The applicable regulations will determine the procedures for this purpose.

Standards for assessing, rating and quantifying the degree of disability

ARTICLE 52. – The rules for evaluation, qualification and quantification of the degree of disability referred to in article 48, paragraph a) will be contained in the regulatory decree of this law.

The rules must contain:

a) Diagnostic tests and studies that must be performed on individuals, according to the reported or detected conditions;

b) The degree of disability for each of the diagnosed conditions;

c) The procedure for making them compatible in order to determine the degree of psychophysical disability of the person;

d) The weighting coefficients of the degree of psychophysical disability according to the level of formal education that the people have;

e) The weighting coefficients of the degree of psychophysical disability according to the age of the persons. The degree of disability of the persons must arise from the combination of the factors of sections c), d) and e).

The implementing authority shall convene an honorary commission to prepare the standards for evaluating, classifying, and quantifying the degree of disability, inviting the dean of the forensic medical corps, the president of the National Academy of Medicine, and representatives of the country’s public and private universities to participate. This honorary commission shall be convened by the Secretary of Social Security of the Nation, who shall preside over it, within sixty (60) days of the enactment of this law and shall issue its findings within six (6) months of its establishment.

Survivor’s pension. Beneficiaries

ARTICLE 53. – In case of death of the retiree, the beneficiary of disability retirement or the active member, the following relatives of the deceased shall be entitled to a pension:

a) The widow;

b) The widower;

c) The cohabitant;

d) The cohabitant;

e) Unmarried sons, unmarried daughters and widowed daughters provided they do not enjoy retirement, pension, withdrawal or non-contributory benefit, unless they opt for the pension granted herein, all of them up to eighteen (18) years of age.

The age limitation established in subsection e) does not apply if the beneficiaries are incapacitated for work on the date of death of the deceased or incapacitated on the date they reach eighteen (18) years of age.

A beneficiary is considered to have been dependent on the deceased when the beneficiary experiences a state of need revealed by a scarcity or lack of personal resources, and the lack of contribution results in a significant imbalance in their personal finances. The implementing authority may establish objective criteria to determine whether the beneficiary was dependent on the deceased.

In the cases referred to in subsections c) and d), it will be required that the deceased was legally or de facto separated, or was single, widowed, or divorced and had publicly cohabited in a de facto marriage for at least five (5) years immediately prior to death. The cohabitation period will be reduced to two (2) years when there is offspring recognized by both cohabitants.

The surviving spouse will be excluded from the cohabiting partner if the latter has been declared at fault for the legal separation or divorce. Otherwise, and if the deceased had been contributing to alimony payments or if such payments had been legally demanded, or if the deceased caused the legal separation or divorce, the benefit will be granted to the spouse and the cohabiting partner in equal shares.

Hereditary transmission

ARTICLE 54. – In the event that there are no beneficiaries, according to the enumeration made in the preceding article, the balance of the individual capitalization account will be credited to the heirs of the deceased declared judicially.

Chapter III Voluntary Contributions and Impositions

Contributions

ARTICLE 55. – The personal contributions destined for the Capitalization Regime established in article 39, once transferred in accordance with the procedure indicated in subsection b) of article 36 of this law, will be credited in the respective individual capitalization accounts of each member.

Voluntary contributions

ARTICLE 56. – In order to increase the ordinary retirement benefit or to advance the date of its receipt, as established in Article 110, the member may make voluntary contributions to their individual capitalization account. At the member’s option, these contributions may be made through the SUSS once the regulations establish the respective procedures, or directly to the administrator.

Agreed deposits

ARTICLE 57. – Agreed deposits consist of single or periodic amounts that any natural or legal person agrees with the member to deposit into their respective individual capitalization account. These deposits will have the same purpose as that described for voluntary contributions and may be paid to the administrator in a similar manner.

The agreed deposits must be made through a written contract that will be sent to the administrator in which the affiliate is incorporated thirty (30) days in advance of the date on which the single or first deposit must be made.

Record of voluntary contributions and agreed deposits

ARTICLE 58. – The quotas representing voluntary contributions and agreed deposits, although they form part of the individual capitalization account, will not be considered in determining the balance of the same for the purposes of calculating the supplementary capital indicated in article 92.

Chapter IV – Pension and Retirement Fund Administrators

Object

ARTICLE 59. – The administrators shall have as their sole and exclusive purpose:

a) To administer a fund that will be called a retirement and pension fund;

b) To grant the benefits and services established by this law.

Each administrator may only manage one retirement and pension fund, and must keep its own separate accounting records from those of the respective fund.

The administrators may not make supplementary offers outside their purpose, nor may they agree to raffles, prizes or other forms that imply a means of improperly attracting members.

Disqualifications

ARTICLE 60. – The following may not be directors, administrators, managers or trustees of an administrator:

a) Those affected by the disqualifications and incompatibilities established in articles 264 and 286 of the Companies Law, nor those disqualified by application of subsection 5 of article 41 of law 21,526;

b) Those who, by a firm decision of a competent authority, have been declared responsible for irregularities in the governance, administration and control of financial entities or insurance companies;

c) Those who have been convicted of crimes committed for profit or crimes against property or public faith or common crimes, excluding negligent crimes with prison sentences or disqualification, until another time equal to twice the sentence has elapsed and those who are under preventive detention for those same crimes, until their final dismissal; those disqualified from the use of bank current accounts and the issuance of checks, until one year after their rehabilitation; those who have been sanctioned as directors, administrators or managers of a company declared bankrupt, while their disqualification lasts.

Denomination

ARTICLE 61 – The corporate name of the administrators must include the phrase ‘Administradora de Fondos de Jubilaciones y Pensiones’ (Pension Fund Administrator) or the acronym ‘AFJP’, and is prohibited from including the following: a) Names of existing natural persons; b) Names or acronyms of existing legal entities or those that existed within the five (5) years prior to the effective date of this law; c) Names of foreign entities operating in the financial, insurance, fund management, or similar sectors; d) Fictitious names that could lead to confusion regarding the entity’s patrimonial or administrative responsibility. In the cases of sections c) and d), the Superintendency of Pension Fund Administrators will determine, based on the regulations issued, the appropriateness of the proposed name for an administrator.

Requirements for authorization. Procedure

ARTICLE 62 – Pension and retirement fund administrators shall be authorized to administer pension and retirement funds and grant the benefits and services established by this law, when they meet the following conditions and comply with the procedure established in this article:

1. Conditions:

a) They have been constituted under the legal forms mentioned in article 40;

b) Demonstrate the full integration of the minimum capital referred to in Article 63 and the reserve requirement referred to in Article 89;

c) It is verified that its directors, administrators, managers and trustees are not disqualified in accordance with the provisions of article 60 of this law and that they have submitted a complete detail of their personal assets;

d) Accreditation of compliance with the levels of technical suitability for business management and administration, the quality of organization for the fulfillment of its purpose, existence of a physical environment for the development of its activities, marketing systems, all other information that demonstrates the economic and financial viability of the project.

2. Procedure:

When an application for authorization is submitted to the Superintendency of Pension and Retirement Fund Administrators, it will verify and evaluate the accompanying documentation accrediting the requirements demanded in subsections a) to d) of section 1, as well as obtain the reports from the relevant bodies in order to verify what is prescribed in subsection c) of the reference section, said data must be provided within fifteen (15) days of having been requested.

Within thirty (30) days of the application being submitted and the aforementioned reports being produced, the superintendent must issue a reasoned decision, either granting the request or denying it.

The resolution denying authorization will contain a complete, precise, and detailed list of all requirements deemed not met by the accompanying documentation and/or reports. The applicant may submit a new application for authorization, attaching new documentation that proves the unmet requirements and/or replacing the disqualified directors, administrators, managers, or trustees.

In this case, the procedure indicated in the second paragraph of section 2 will apply.

The superintendent may not deny the requested authorization unless it is due to a lack of accreditation of the requirements demanded by this law and the other conditions established by the regulatory rules.

minimum capital

ARTICLE 63 – The minimum capital required for the establishment of an administrator shall be three million pesos ($3,000,000), which must be subscribed and paid in cash at the time of establishment. The minimum capital required may be modified by resolution of the supervisory authority in accordance with the procedure established by the regulations.

All initial capital exceeding the minimum must be paid in within the period established in the Commercial Companies Law.

If the minimum required capital of the administrator is reduced for any reason, it must be fully replenished within three (3) months of the event. Otherwise, the Superintendency of Pension Fund Administrators will revoke the authorization to operate and liquidate the administrator.

The reintegration of the minimum capital must be carried out by the administrator, within the indicated period, without the need for prior notice or notification by the supervisory authority.

In addition to the minimum capital required, the administrator must constitute the reserve established in article 89.

Advertising

ARTICLE 64 – Administrators may only carry out advertising from the date established for this purpose by the regulatory rules and provided that the resolution authorizing their operation as administrator of retirement and pension funds has been issued.

All advertising or promotion by pension fund administrators must comply with the general regulations established for this purpose by the Superintendency of Pension Fund Administrators. The information must be truthful and timely, and must not be misleading or confusing, either regarding the administrator’s financial characteristics or the purposes, foundations, and benefits of the system.

Public Information

ARTICLE 65 – The administrators must keep the following written and up-to-date information in their offices, in a place easily accessible to the public:

1. Background of the institution, indicating the name and surname of its directors, administrators, managers and trustees.

2. Balance sheet for the last financial year, income statement and all other accounting information that the enforcement authority determines.

3. Value of the retirement and pension fund, the fluctuation fund referred to in Article 87 and the reserve.

4. Value of the pension and retirement fund share.

5. Scheme and amount of current commissions.

6. Composition of the investment portfolio of the retirement and pension fund and name of the securities depositories and banks where the securities are deposited, and of the life insurance company with which the insurance referred to in article 99 of this law was contracted.

This information must be updated monthly, within the first ten (10) days of each month, or when any external or internal event may significantly alter the content of the information available to the public.

Information for the member or beneficiary

ARTICLE 66 – The administrator must periodically send to each of its members or beneficiaries, at their home address and at least every four (4) months, the following information regarding the composition of the balance of their individual capitalization account:

1. Number of installments registered at the beginning of the reporting period.

2. Type of transaction, date, and amount in installments. When the transaction refers to a debit for commissions, the amount must specify the cost attributable to the disability and death insurance premium and the other items that make up the commission. The regulations will establish the procedures for such itemization.

3. Balance of the respective installment account.

4. Value of the installment at the time of each transaction.

5. Percentage variation of the value of the fee for each of the months included in the information period.

6. Fund profitability.

7. Average system profitability and average system commission.

This communication may be suspended for any member who does not register any activity related to contributions, voluntary contributions, or agreed-upon deposits in their account during the last reporting period. However, the administrator that suspends sending this information must still inform the member of their account status at least once a year.

The regulations may provide for a reduction in the time limits for informing the member.

Commissions

ARTICLE 67. – The administrator shall be entitled to remuneration through the collection of commissions, which shall be debited from the respective individual capitalization accounts.

The commissions will be the administrator’s only income on behalf of its members and beneficiaries, and must cover the financing of all services, obligations and benefits for which it is ultimately responsible, in favor of the members and beneficiaries incorporated into it, as prescribed by this law and its regulatory rules.

The amount of the commissions will be freely established by each administrator. Their application will be uniform for all its members or beneficiaries, except in situations provided for by this law or its regulations.

Commission system

ARTICLE 68. – The commission system established by each administrator shall comply with the following guidelines:

a) Only the following may be subject to the collection of commissions: the crediting of contributions; the crediting of voluntary contributions and agreed deposits; and the payment of withdrawals made under the programmed withdrawal modality;

b) The commission for the crediting of mandatory contributions may only be established as a percentage of the taxable base that gave rise to it, as a fixed sum per transaction, or as a combination of both. This commission will not be applied to amounts that, by virtue of the provisions of the second paragraph of Article 9, exceed the maximum set in the first paragraph of the same article;

c) Commissions for the crediting of voluntary deposits and agreed deposits may be established on the basis of a percentage of the values ​​involved, a fixed sum per operation, or a combination of both;

d) Commissions for the payment of scheduled withdrawals may be established as a monthly percentage on the balance of the beneficiary’s individual capitalization account, as a fixed sum per operation, or as a combination of both.

Commission bonus

ARTICLE 69. – Administrators that deem it appropriate may introduce a bonus scheme for the commissions established in subsections b) and d) of Article 68, which may not discriminate against members or beneficiaries within the same category. The definition of these categories of members or beneficiaries may only be based on the number of months they have made contributions or withdrawals with the corresponding administrator. The regulations will establish the procedure for determining the respective categories.

The bonus amount must be established as a percentage reduction on the current commission structure and must be applied simultaneously with the collection of the respective commissions. The bonus amount will be credited to the respective individual capitalization account of the member or beneficiary, as applicable.

Validity of the commission system

ARTICLE 70. – The commission system determined by each administrator must be reported to the Superintendency of Pension and Retirement Fund Administrators in the manner indicated by the regulatory rules and its modifications will come into effect ninety (90) days after its approval.

Liquidation of an administrator

The Superintendency of Pension Fund Administrators will proceed to the liquidation of a pension fund administrator when any of the following scenarios are verified:

a) The administrator’s capital is reduced to an amount lower than the minimum established in Article 63, and it has not been fully repaid within the established period;

b) A reserve deficit is verified on more than two (2) occasions within a calendar year. For the purposes of this calculation, the generation of a deficit as a consequence of the process established by article 90 will not be taken into account;

c) It has not covered the minimum profitability established in Article 86 or replenished the affected reserve within the time limits set in Article 90;

d) The Superintendency of Pension and Retirement Fund Administrators has verified any other fact that has been provided for as a sanction such consequence;

e) The administrator has entered into a state of insolvency, whatever the cause and nature of the obligations affected.

The State will participate as a creditor in the liquidation process of an administrator, for the payments it has made under the compliance with the minimum profitability guarantee established in article 90.

Liquidation procedure

ARTICLE 72. – Within 72 business hours of the Superintendency of Pension and Retirement Fund Administrators becoming aware of any of the facts stated in the preceding article that affect an administrator, the superintendent shall:

a) Issue a resolution revoking the authorization to operate in the administration of a retirement and pension fund for the administrator in question, as indicated in the preceding article. This resolution will imply the dissolution of the administrator due to loss of purpose and entails the expiration of all rights of the retirement and pension fund administrator, its directors, representatives, managers, and trustees, and other governing, administrative, and supervisory bodies, to administer the fund. The resolution will be reliably communicated to the administrator and all banking entities authorized by Law 21,526 and securities depositories where the retirement and pension fund and the transitional fund are deposited, and for this purpose, the cooperation of the Central Bank of the Argentine Republic and the National Securities Commission will be required.

b) To replace it in the administration of the retirement and pension fund it manages, its transitional fund, and any other assets belonging to the fund, for which purpose it will designate officials of the Superintendency of Retirement and Pension Fund Administrators who will temporarily exercise the administration, taking possession of the administrator’s premises, and communicating their designation in accordance with the provisions of the preceding paragraph and to the director, representative, trustee, manager, or any member of the management, administration, and control bodies who may be found. If the personnel designated by the Superintendency of Retirement and Pension Fund Administrators are denied entry and the performance of their duties, it may request the immediate and due assistance of the public force in order to guarantee that documentation or information of the administrator is not removed or destroyed, requesting the pertinent search warrant from the competent judge, if for reasons of expediency it has not been possible to do so prior to the proceedings;

c) To inform the national commercial judge, or federal judge with jurisdiction in commercial matters, according to the jurisdiction corresponding to the administrator’s domicile, of all actions taken, requesting:

1. Decree the liquidation of the administrator and the appointment of a liquidator for the same.

2. Place an attachment on all the administrator’s assets.

3. If the scenario described in the following section occurs, you must also request that a general freeze be placed on the assets of the directors, representatives, trustees, managers and all other members of the management, administration and control bodies of the administrator;

d) If there are indications that an illegal act has been committed, it must be reported to the federal judge with criminal jurisdiction in the jurisdiction of the administrator’s domicile;

e) For the following forty-five business days, extendable by a reasoned resolution for another forty-five days, the Superintendency of Pension Fund Administrators shall continue to administer the pension fund, and may hire temporary personnel, including from the liquidated administrator itself, to assist in the administration. It shall also:

1 Determine the amount necessary to make effective the guarantees established in Chapter XII of this title.

2. The commissions received during this period will be applicable to the replenishment of the fund and the payment of the essential inputs for the administration of the fund.

3. If, after the procedure indicated in the previous sections has been carried out, the fund has not been replenished, the Superintendency will request the Treasury Secretariat to send the missing amount to cover these objectives, based on the guarantee provided in Chapter XII, which must be sent within five days.

4. Once the guarantee has been enforced, the Superintendency of Pension Fund Administrators will notify all members enrolled with the administrator in liquidation to transfer to another administrator within ninety days, under penalty of proceeding as indicated in the second paragraph of Article 43, and will notify the employer of each member of this resolution. The right of members to transfer will be suspended until the fund is restored to the minimum profitability level. The implementing decree of this law will establish the transfer procedure for self-employed members.

Once the term established in subsection e) of this article has expired, the intervention of the Superintendency of Pension Fund Administrators ceases, except to guarantee the effective transfer of the accounts of the members to the new administrator they have chosen and to represent the national State in the liquidation process of the administrator.

The national State, for the contributions made under the guarantee made effective, will have in the liquidation of the administrator the same preference as the creditors of the bankruptcy.

The resolutions issued during this process by the Superintendency of Pension Fund Administrators will be subject to appeal, with devolutive effect, before the National Chamber of Appeals in Commercial Matters or the Federal Chamber of Appeals with jurisdiction in commercial matters, depending on whether the administrator’s domicile is in the Federal Capital or in the provinces, respectively.

If the liquidation of an administrator is due to illegal acts committed by its directors, representatives, managers, trustees, and in general the members of the management, administration and oversight bodies, those who committed or consented to it will be liable for the debts of the administrator with their personal assets.

Absorption

ARTICLE 73. – The dissolution of two or more administrators that merge to form a new one or the dissolution of one or more administrators by absorption of another, must be authorized by the control authority, complying with the requirements established by the regulatory norms for these cases.

Chapter V

Investments

General criteria. Permitted investments

ARTICLE 74.- The assets of the retirement and pension fund shall be invested in accordance with appropriate security and profitability criteria, respecting the limits established by this law and its regulations. Retirement and pension fund administrators may invest the assets of the managed fund in:

a) Public securities issued by the Nation through the Treasury Secretariat, or the Central Bank of the Argentine Republic, up to fifty percent (50%) of the total assets of the fund;

b) Securities issued by the provinces, municipalities, autonomous entities of the national and provincial State, national, provincial or municipal State companies, up to thirty percent (30%);

c) Negotiable obligations, debentures and other securities representing debt with a maturity of more than two (2) years, issued by national corporations, financial entities, cooperatives and civil associations established in the country and branches of foreign companies, authorized to offer to the public by the National Securities Commission, up to forty percent (40%);

d) Negotiable obligations, debentures or other securities representing debt with a maturity of less than two (2) years, issued by national corporations, financial entities, cooperatives and civil associations established in the country and branches of foreign companies, authorized to offer to the public by the National Securities Commission, up to twenty percent (20%);

e) Convertible negotiable obligations issued by national corporations, financial entities, cooperatives and civil associations established in the country and branches of foreign companies, authorized to offer to the public by the National Securities Commission, up to forty percent (40%);

f) Convertible negotiable obligations issued by privatized public companies, authorized for public offering by the National Securities Commission, up to twenty percent (20%);

g) Fixed-term deposits in financial institutions governed by Law 21,526, up to thirty percent (30%). This may be increased to forty percent (40%) provided that the excess is allocated to loans or investments in regional economies;

h) Shares of national, mixed or private public limited companies, whose public offering is authorized by the National Securities Commission, up to fifty percent (50%).

Trading in shares includes futures and options on these securities, subject to the limitations established by the regulations;

i) Shares of privatized public companies, authorized for public offering by the National Securities Commission, up to twenty percent (20%);

j) Units of common investment funds authorized by the National Securities Commission, open or closed capital, up to twenty percent (20%);

k) Securities issued by foreign States or international organizations, up to ten percent (10%);

l) Securities issued by foreign companies admitted to trading on markets determined by the National Securities Commission, up to ten percent (10%);

m) Contracts traded in futures and options markets subject to official control and supervision and under the conditions and sectors established and regulated by the latter, up to ten percent (10%);

n) Mortgage bonds, mortgage bills and other securities that have a mortgage guarantee or whose services are guaranteed by participations in loans with mortgage guarantee, authorized for public offering by the National Securities Commission, up to forty percent (40%);

N) Securities representing participation quotas in direct investment funds, of a fiduciary and singular nature, with a public offering authorized by the National Securities Commission, up to ten percent (10%);

The investments indicated in subsections b) to Ñ) will be subject to the requirements and conditions established in article 76.

Regulatory rules may not set minimum limits for the investments indicated in this article.

The National Securities Commission, the Central Bank of the Argentine Republic and the Superintendency of Pension Fund Administrators shall jointly be responsible for setting maximum limits for the investments included in subsections a) to n), provided that they are lower than the percentages established in this article.

Prohibitions

ARTICLE 75. – The assets of the retirement and pension fund may not be invested in:

a) Shares of pension and retirement fund administrators;

b) Shares in insurance companies;

c) Shares of investment fund management companies, whether common or direct, of a fiduciary and singular nature;

d) Shares in risk rating agencies;

e) Securities issued by the controlling, controlled or related entities of the respective administrator, either directly or through their integration within an economic group subject to common control;

f) Preferred shares;

g) Multiple voting shares.

Under no circumstances may the administrators carry out stock market or off-exchange guarantee operations with the securities that make up the assets of the retirement and pension fund, nor financial operations that require the establishment of pledges or liens on the fund’s assets.

Limitations

ARTICLE 76 –

a) Investments in negotiable bonds, debentures and other debt securities corresponding to Argentine issuers will be subject to the following limitations:

1. In no case may the sum of the investments in the securities listed in subsections d), e) and f) of article 74 corresponding to a single issuing company exceed the proportion that the regulatory rules establish on the total sum of the fund’s investments in said concepts and/or the proportion that the liabilities implemented in the aforementioned securities by said company and/or the proportion that the total assets of the fund establish.

2. In no case may the sum of the investments in the securities listed in subsections c), d), e) and f) of article 74 exceed forty percent (40%) of the fund’s assets;

b) Investments in shares corresponding to Argentine issuers will be subject to the following limitations:

1. In no case may the sum of the investments made in shares in accordance with the provisions of subparagraphs h) ei) of article 74 corresponding to a single issuing company exceed the proportion that on the total sum of the investments

of the fund in said concepts and/or the proportion that the regulatory rules establish on the share capital of the issuer and/or the proportion that the total assets of the fund establish.

2. In no case may the sum of the investments made in shares in accordance with the provisions of subparagraphs h) ei) of article 74, exceed fifty percent (50%) of the fund’s assets.

3. The limitations referred to in the preceding paragraphs may be temporarily exceeded in the cases determined by the regulatory rules, and the corresponding limits must be restored within the time limits set by the National Securities Commission;

c) Investments in securities corresponding to foreign issuers will be subject to the following limitations:

1. In no case may the investment in securities in accordance with the provisions of paragraph 1 of article 74 corresponding to a single issuer exceed the proportion that the regulatory rules establish on the total investments of the fund in securities of foreign issuers and/or the proportion that the regulatory rules establish on the capital of each company or the liability implemented in securities by the same and/or the proportion that the regulatory rules establish on the total assets of the fund.

2. In no case may the investment in securities in accordance with the provisions of subparagraph k) of article 74 corresponding to a single issuer exceed the proportion that the regulatory rules establish on the total investments of the fund in securities of foreign issuers.

3. In no case may the sum of the investments established in subsections k) and l) of article 74 exceed ten percent (10%) of the total assets of the fund;

d) Investments in units of mutual funds will be subject to the following limitations:

Under no circumstances may the investments in units of a common investment fund established in subsection j) of article 74 exceed the proportion that the regulatory rules establish on the total investments made by the fund in this concept and/or the proportion that the regulations establish on the equity of the common investment fund;

e) In no case may the investments established in subsection g) of article 74 deposited in a single financial entity exceed the proportion that the regulatory rules establish on the total investment made in fixed term deposits by the fund;

f) In no case shall investments made in a national or foreign company enable the exercise of more than five percent (5%) of the voting rights, in all kinds of assemblies, whatever the respective holding;

g) In no case may the investments established in subsection n) of article 74 corresponding to a single issuing company exceed the proportion that the regulatory rules establish on the total sum of the fund’s investments in said concepts and/or the proportion that the liabilities implemented in the aforementioned securities and/or the proportion that the total assets of the fund establish;

h) In no case may the investments in units of a direct investment fund established in subparagraph ñ) of article 74 exceed the proportion that the regulatory rules establish on the total investments made by the fund in this concept and/or the proportion that the regulations establish on the equity of the direct investment fund.

Temporary funds. Current accounts

ARTICLE 77. – The fund’s assets, insofar as they are not to be immediately applied, as established in Article 74 and the conditions and special situations established by the regulatory rules, will be deposited in banking entities in accounts exclusively for the fund, in which all contributions corresponding to the capitalization scheme of the members, the proceeds of investments, income from transfers from other administrators and transfers from the reserve must be deposited.

From these accounts, withdrawals may only be made for the purpose of making investments for the fund, and for the payment of benefits or commissions, transfers and remittances established by this law.

The accounts will be held in banking financial institutions authorized by Law 21,526 and qualified to receive this type of deposit by the Central Bank of the Argentine Republic. The aforementioned bank may delegate the rating described in the preceding paragraph to companies registered in the Registry of Risk Rating Agencies provided for in Article 5 of Decree 656/92, issuing the corresponding regulations for said rating.

Requirements for securities and markets

ARTICLE 78 – All securities, public or private, that may be subject to investment by retirement and pension funds, must be authorized for public offering and be traded in transparent secondary markets, which provide daily truthful and accurate information on the course of quotations in a public and accessible manner to the general public.

The National Securities Commission will determine which markets meet the requirements set forth in this article.

Risk ratings

ARTICLE 79. – The investments mentioned in article 74, subsections b), g) and k) must be previously qualified by the Central Bank of the Argentine Republic as being eligible to be acquired with the resources of retirement and pension funds.

For the purposes of rating, the Central Bank of the Argentine Republic will issue the corresponding regulations, which will address the guarantees, term, equity responsibility of the issuing entities, conditions of the world markets in terms of freedom of exchange and any other requirement that tends to safeguard the security and acceptable profitability of the investments.

The Central Bank of the Argentine Republic may delegate to companies registered in the Registry of Risk Rating Companies provided for in article 5 of decree 656/92, the rating described in the preceding paragraphs.

The private securities listed in subsections c), d), e), f), h), j), l) and n) of article 74 must have been previously qualified by companies registered in the Registry of Risk Rating Companies provided for in article 5 of decree 656/92.

The National Securities Commission will issue the regulatory rules for the classification activity provided for in this law, in accordance with the provisions of decree 656/92.

The regulatory norms must address the guarantee conditions of the securities, not only in relation to those special guarantees that they may contain but also those that respond to the organization and administration of the company, the existence of majority shareholders, the statement of its investment policy and distribution of profits and an adequate opening of the capital.

In the case of mutual funds, special consideration will be given to the degree of risk diversification of their portfolio, as well as the fund’s special characteristics regarding its investment policy.

In the case of direct investment funds, the nature and other characteristics of the investment projects undertaken through them will be taken into account, as well as the technical and economic solvency of their operators and any other relevant element to assess their risk.

The ratings made by the risk rating agencies will be submitted to the National Securities Commission for approval, if required by the regulatory norms, in accordance with the provisions included therein.

The investments established in subsections f) and ei) of Article 74 will not require a risk rating during the period between the effective privatization of the company and the date of submission of the financial statements corresponding to the first fiscal year-end of the new company. The regulations will establish the standards to which the portfolios of retirement and pension funds must adhere once the companies have been rated.

The Superintendency of Pension and Retirement Fund Administrators will determine what qualification level will be able to access and integrate investments of pension and retirement funds.

Investment control

ARTICLE 80 – The control of investments made by pension fund administrators will correspond to the Superintendency of Pension Fund Administrators.

Investments. Custody. Sale and delivery of securities

ARTICLE 81 – The securities representing the investments of the retirement and pension fund and the reserve must be kept at all times in a deposit whose holder may be a securities depository authorized by the National Securities Commission, or one of the banking entities that the Central Bank of the Argentine Republic and the Superintendency of Retirement and Pension Fund Administrators determine.

Each month, the Superintendency of Pension and Retirement Fund Administrators will inform the depositary of the minimum amount that each administrator must keep in custody.

The administrator who fails to comply with these provisions will be subject to the penalties established in this law and its implementing regulations. The depository entity will be liable for any withdrawal of securities held in custody if such withdrawal results in non-compliance with the obligation established in this article.

Custody fees will be freely agreed upon by the parties. For the transfer or assignment of the fund’s ownership certificates to be valid, it must be carried out by delivering the certificate, duly endorsed if applicable, and, if it is a registered, non-endorsable, or book-entry certificate, with the corresponding notification to the issuer.

Chapter VI – Retirement and Pension Fund

Retirement and Pension Fund

ARTICLE 82 – The retirement and pension fund is an independent asset, separate from the assets of the administrator, and belongs to the members. The administrator has no ownership rights over it. The assets and rights comprising the retirement and pension fund are exempt from seizure and are intended solely to generate benefits in accordance with the provisions of this law.

Integration

ARTICLE 83 – The retirement and pension fund shall be constituted by:

a) The integration of contributions destined for the Capitalization Regime, voluntary contributions and agreed deposits;

b) The integration of the funds corresponding to the members who have exercised the option of transferring from another administrator;

c) The integration of the complementary and recomposition capital established in Articles 92 and 94;

d) The profitability corresponding to the investments made in accordance with the provisions of Chapter V of this title;

e) Transfers of funds from the reserve under the conditions established in Article 90;

f) Transfers of resources from the fluctuation fund in accordance with the provisions of Articles 88 and 90;

g) The integrations of the national State under the conditions established in subsections a) and b) of article 124.

Deductions

ARTICLE 84.º- The following items shall be deducted from the fund’s assets:

a) The sums corresponding to the payment of commissions to the administrator;

b) The transfer of funds to the retirement insurance companies corresponding to the members who opt for the pension life annuity modality;

c) The payment of benefits governed by the modalities of subsections b) and c) of article 100;

d) The payment of the sums corresponding to the inheritance transfer in accordance with the provisions of article 54 of this law;

e) Transfers of funds corresponding to members who have exercised the option to transfer to another administrator;

f) The sums corresponding to the part of the balance of the individual capitalization accounts that must be transferred to the SUSS pursuant to the provisions of article 126.

Fees

ARTICLE 85 – The co-ownership rights of each member or beneficiary in the respective retirement and pension fund shall be represented by shares of equal value and characteristics. The value of said shares shall be determined daily based on the valuation established by this law and its implementing regulations, of the investments representing the respective retirement and pension fund. Upon commencing operations, an administrator shall define the initial value of the share of the retirement and pension fund it manages, which shall correspond to a whole number multiple of ten pesos ($10).

The average value for a calendar month of a fund’s share will be determined by dividing the sum of the share value for each day of the respective month by the number of days in the month.

Profitability

ARTICLE 86 – The fund’s profitability is defined as the percentage change over the last twelve (12) months in the average value of its respective unit. This index, and all those derived from it, will be calculated monthly.

The average profitability of the system will be determined by calculating the weighted average profitability of each fund according to the mechanisms established by the regulatory rules.

The fund managers will be responsible for ensuring that the return on their respective funds is not less than the minimum return of the system. This responsibility will be determined on a monthly basis.

The minimum profitability of the system is defined as seventy percent (70%) of the average profitability of the system, or the average profitability of the system minus two (2) percentage points, whichever is lower.

The minimum profitability requirements will not apply to administrators that have been in operation for less than twelve (12) months.

Fluctuation fund

ARTICLE 87 – In order to guarantee the minimum profitability referred to in the previous article, there will be a fluctuation fund for each retirement and pension fund that will be an integral part of it.

Integration and application of the fluctuation fund

ARTICLE 88. The fluctuation fund shall be established monthly and only if the fund’s profitability is positive. It shall be comprised of any excess of the fund’s profitability over the average profitability of the system increased by thirty percent (30%) or the average profitability of the system increased by two (2) percentage points, whichever is greater. The fluctuation fund shall be expressed in units of the respective retirement and pension fund, and its balance shall only be used for the following purposes:

a) Cover the difference between the minimum profitability of the system defined in Article 86 and the profitability of the fund, if the latter is lower;

b) Increase, at the opportunity that the administrator deems appropriate, the profitability of the fund in a given month, provided that the following conditions are met:

1. After the fluctuation fund is affected, its balance must at least represent three percent (3%) of the amount of the retirement and pension fund.

2. In any given month, no more than ten percent (10%) of the corresponding fluctuation fund may be released;

c) Mandatorily credit as additional quotas in the individual capitalization accounts of the members, according to the procedure established by the regulatory rules, the accumulated funds that exceed for more than two (2) years five percent (5%) of the value of the retirement and pension fund;

d) Allocate to the retirement and pension fund the total balance of the fluctuation fund on the date of liquidation or dissolution of the administrator.

Lace

ARTICLE 89 – The administrators must integrate and maintain at all times an asset equivalent to at least two percent (2%) of the respective retirement and pension fund, which will be called the reserve. This reserve may never be less than three million pesos ($3,000,000) and will be intended to meet the minimum profitability requirements referred to in Article 86.

The reserve requirement will be calculated weekly, taking into account the average value of the fund during the fifteen (15) consecutive days prior to the calculation date.

The reserve amount must be invested in the same instruments authorized for the fund and with the same limitations. The reserve is exempt from seizure.

Any deficit in the reserve not originating from the application process established in article 90, will be governed by the integration rules and deadlines, penalties and claims established for this purpose by the regulatory rules.

Guarantee of minimum profitability

ARTICLE 90. When the fund’s profitability in a given month is lower than the minimum profitability of the system and this difference cannot be covered by the respective fluctuation fund, the administrator must apply, within ten (10) days of being notified by the Superintendency of Pension Fund Administrators, the necessary reserve resources for this purpose. If, after fully applying the reserve resources, the fund’s profitability shortfall cannot be covered, the State will supplement the difference.

The administrator who has not covered the minimum profitability of the system or restored the reserve within fifteen (15) days following its impact will be dissolved by operation of law, and must be liquidated in accordance with Article 71.

Chapter VII – Financing of benefits

Financing

ARTICLE 91 – The ordinary retirement benefits, disability retirement and death pension established in this law for the capitalization system will be financed with the balance of the affiliate’s individual capitalization account, in accordance with article 27 of this law.

With regard to ordinary retirement and the survivor’s pension derived from it, the balance of the individual capitalization account will consist of the accumulated capital.

Regarding retirement due to disability and the pension for the death of the active member, the balance of the individual capitalization account will consist of the accumulated capital plus the complementary capital that the administrator must integrate according to the provisions of articles 92 and 93.

Complementary capital

ARTICLE 92 – For the purposes of definitive retirement due to disability and the pension upon the death of an active member, the supplementary capital will be given by the difference between:

1) the necessary technical capital determined in accordance with Article 93, and

2) The capital accumulated in the member’s individual capitalization account on the date the final disability ruling is issued or the date of death, depending on the applicable benefit. When the aforementioned difference results in a negative value, the supplementary capital will be zero.

Technical capital required

ARTICLE 93 – The necessary technical capital will be determined according to the following guidelines:

a) For the purposes of definitive retirement due to disability, as the expected present value of the reference benefits of the deceased and his beneficiaries from the date on which the definitive disability ruling is executed until the extinction of the right to pension of each of the accredited beneficiaries, once the benefits charged to the distribution system mentioned in article 27 have been deducted;

b) For the purposes of the pension for the death of the active member, as the expected present value of the reference benefits of the pension beneficiaries from the date of death of the deceased until the extinction of the right to pension of each of the accredited beneficiaries, once the benefits charged to the distribution system mentioned in article 27 have been deducted.

The necessary technical capital will be calculated according to the technical bases established jointly by the Superintendency of Pension Fund Administrators and the Superintendency of Insurance of the Nation and in accordance with the provisions of articles 97 and 98.

Recomposition capital

ARTICLE 94 – The term “recomposition capital” is defined as the amount representing the contributions to the capitalization system that the member entitled to temporary disability retirement has accumulated in their account during the period of receiving the benefit on a temporary basis. The regulations will determine how the corresponding capital is calculated.

Responsibility and obligations

ARTICLE 95.º- The administrator shall be exclusively responsible and shall be obliged to:

a) The payment of the temporary disability retirement benefit to members declared disabled, once the benefits payable by the distribution system under Article 27 have been deducted through the temporary ruling, provided that:

1. Members are regularly making their contributions, in accordance with the regulations.

2. Members who, according to the regulations, were irregularly fulfilling their obligation to contribute but retained their rights;

b) The integration of the corresponding supplementary capital, for active members who generate survivor’s pensions under the conditions established in sections 1 and 2 of subsection a).

Other obligations of the administrator

ARTICLE 96 – The administrator shall also be obligated to the members included in subsection a) of the preceding article for the following concepts:

a) The integration of the corresponding supplementary capital when they acquire the right to receive the definitive disability retirement, according to the final ruling;

b) The integration of the corresponding supplementary capital, when, due to their death, they generate death pensions;

c) The integration of the recomposition capital, when they do not acquire the right to definitive retirement due to disability, according to the final ruling.

Once the administrator has fulfilled the obligations of subsection b) of Article 95 and subsections a) and b) of this article, no new beneficiaries may be accredited for the purposes of calculating the supplementary capital, without prejudice to their maintaining their status as pension beneficiaries. The obligation established in subsection c) must be fulfilled on the date the final ruling rejecting the disability becomes final or upon expiration of the period established by the regulations.

Base income. Reference benefit of the deceased. Benefit of the deceased

ARTICLE 97 – Base income shall be understood to mean the representative value of the monthly average of the remunerations and/or taxable income declared in the five (5) years prior to the month in which the death occurs or the temporary disability of a member is declared. Amounts corresponding to the annual bonus and amounts that, by virtue of the rules established in the second paragraph of Article 9, exceed the maximum set in the first paragraph of the same article, shall not be taken into account in the preceding calculation. The regulations shall establish the procedure for calculating the base income, which, once determined, must be expressed in units of the respective retirement and pension fund, taking the value of said unit corresponding to the last day of the month prior to the date of death or declaration of temporary disability.

For the purposes of calculating the necessary technical capital established in Article 93 and the payment of the temporary disability retirement benefit, the reference benefit of the deceased or the benefit amount established in subsection a) of Article 28, shall be equivalent to:

a) Seventy percent (70%) of the base income, in the case of members who fall under section 1 of subsection a) of article 95 who die or are entitled to receive temporary disability retirement;

b) Fifty percent (50%) of the base income, in the case of members who fall under section 2 of subsection a) of article 95, who die or are entitled to receive temporary disability retirement.

Reference benefit for pension recipients. Survivor’s pension amount

The percentages detailed in this article shall apply to the determination of the reference benefits for pension beneficiaries and the amount of survivor’s pensions, and shall be applied in accordance with the following rules:

1. For the determination of the reference benefits of pension beneficiaries, established in Article 93, the percentages shall be applied to the reference benefit of the deceased determined in Article 97;

2. For the determination of the pension amount for the death of an active member, established in article 27, the percentages will be applied to the reference benefit of the deceased determined in article 97;

3. For the determination of the pension amount for the death of the beneficiary, established in the second paragraph of article 27, the percentages will be applied to the amount of the benefit that the deceased was receiving.

The percentages referred to will be:

a) Seventy percent (70%) for the widow, widower or cohabitant, if there are no children entitled to a pension;

b) Fifty percent (50%) for the widow, widower or cohabitant, when there are children entitled to a pension;

c) Twenty percent (20%) for each child.

In addition to the stated percentages, the following guidelines should be taken into account:

I. If there is no widow, widower or cohabitant entitled to a pension, the percentage of the pension benefit of the child or children established in subsection c) will be increased by distributing the percentage set in subsection b) equally).

II. The sum of the pensions of all beneficiaries may not exceed one hundred percent (100%) of the deceased’s pension. Should this occur, the pension of each beneficiary must be recalculated, maintaining the same proportions that corresponded to them according to the percentages indicated above.

Group disability and death insurance

ARTICLE 99. – In order to guarantee the full financing of the obligations established in articles 95 and 96, each administrator must contract, through the insurance companies defined in article 175, a single group disability and death insurance policy, through a bidding process whose terms must be published in one of the newspapers with the largest circulation in the country and in the domicile of the administrator, who may choose any of the proposals that comply with the aforementioned terms.

The group insurance contracted does not in any way exempt the administrator from the responsibilities and obligations established in articles 95 and 96.

The Superintendency of Pension Fund Administrators and the Superintendency of Insurance of the Nation will jointly dictate the minimum guidelines to which the aforementioned insurance policy must conform.

In the event of the administrator’s bankruptcy or dissolution, and for the duration of the liquidation process, the debits made to the respective individual capitalization accounts for commissions, as established in Article 67, shall be allocated first to the payment of the insurance policy premium stipulated in the first paragraph of this article, and shall be exempt from attachment to the extent corresponding to these payments. Furthermore, the insurance company’s obligation to finance temporary disability withdrawals and the corresponding supplementary or reconstitution capital shall remain in effect for the administrator in bankruptcy, dissolution, or liquidation, or for the administrator to which the members or beneficiaries involved are transferred. The funds received by the administrator in bankruptcy, dissolution, or liquidation for these purposes shall be exempt from attachment and shall not be included in the estate of creditors.

Chapter VIII – Modality of benefits

Ordinary retirement and permanent retirement due to disability

ARTICLE 100. – Members who meet the requirements for ordinary retirement and beneficiaries declared disabled by a final disability ruling may use the balance of their individual capitalization account to access their respective retirement or disability pension, as appropriate, in accordance with the procedures detailed in the following sections:

a) Pension life annuity;

b) Scheduled withdrawal;

c) Fractional withdrawal.

The administrator will verify compliance with the requirements, recognize the benefit, and issue the corresponding certificate.

Pension life annuity

ARTICLE 101. – A life annuity is a type of retirement or permanent disability pension contracted by a member with a retirement insurance company, in accordance with the following guidelines:

a) The contract will be signed directly by the member with the retirement insurance company of their choice, in accordance with the procedures established by the regulations. Once the administrator has been notified by the member and the corresponding company, it will be obliged to transfer to the latter the funds from the member’s individual capitalization account that correspond, the administrator being obligated to verify the requirements established in subsection c);

b) From the date of the execution of the retirement annuity contract, the retirement insurance company shall be solely responsible and obligated to pay the corresponding benefit to the beneficiary from the moment the contract is signed until their death, and from that moment onward, to pay any survivor’s pensions to the beneficiaries of the deceased at the time the contract was signed. The pension amount shall be determined based on the percentages established in Article 98, which shall be applied to the benefit amount of the deceased;

c) For the calculation of the benefit amount to be received under the pension life annuity modality, the total balance of the member’s capitalization account must be considered, unless the member chooses to contract a benefit of no less than seventy percent (70%) of the respective retirement base or the amount equivalent to three (3) times the maximum universal basic benefit. In such circumstance, the member, once the corresponding premium has been paid, may freely dispose of the excess balance remaining in the capitalization account, which may not exceed five hundred (500) times the amount of the maximum universal basic benefit in the calculation month;

d) The retirement base shall be understood to be the representative value of the monthly average of the taxable wages and/or income declared in the five (5) years prior to the month in which a member opts for the corresponding benefit. The regulations shall establish the procedure for calculating the aforementioned amount.

Scheduled withdrawal

ARTICLE 102. – Scheduled withdrawal is that type of retirement or definitive retirement due to disability that the member agrees with an administrator, in accordance with the following guidelines:

a) The amount of funds to be withdrawn monthly from the individual capitalization account will be set at a constant purchasing power amount throughout the year and will result from relating the member’s effective account balance for each year to the actuarial value necessary to finance the corresponding benefits. The member may choose to withdraw a sum lower than that resulting from the aforementioned calculation;

b) The Superintendency of Pension Fund Administrators will determine the calculation method and technical basis for determining the necessary actuarial value, which must include, by virtue of the beneficiaries of the affiliate defined in Article 53, the payment of any survivor’s pensions that may arise. For this purpose, the pension amount will be set according to the percentages established in Article 98, which will be applied to the benefit amount of the deceased;

c) The member who, at the time of exercising the programmed withdrawal modality, registers a balance in his individual capitalization account that allows him to finance a benefit no less than seventy percent (70%) of the respective retirement base defined in subsection d) of article 101 and three (3) times the amount of the maximum universal basic benefit, may freely dispose of the excess balance, which may not exceed five hundred (500) times the amount of the maximum universal basic benefit in the calculation month.

Fractional withdrawal

ARTICLE 103. – Fractional withdrawal is that form of retirement or definitive retirement due to disability that the member agrees with an administrator in accordance with the following guidelines:

a) Only members whose initial benefit amount, calculated according to the method established in subsection b) of article 100, is less than fifty percent (50%) of the equivalent of the maximum basic universal benefit may opt for this modality;

b) The amount of funds to be withdrawn monthly from the individual capitalization account will be equivalent to fifty percent (50%) of the benefit corresponding to the maximum basic universal benefit in force at the time of each withdrawal;

c) The fractional withdrawal option will be terminated when one of the following events occurs:

1. When the balance of the individual capitalization account is exhausted.

2. When the beneficiary dies, the remaining balance of the account will be given to the heirs of the deceased;

d) Fractional withdrawals will not be subject to fees from the administrator.

Temporary disability retirement

ARTICLE 104. – Members declared disabled, included in subsection a) of article 95, will receive the temporary disability retirement, which will be financed by the administrator and will be adjusted to the provisions of article 97.

Members who, having been declared disabled, are not included in sections 1 and 2 of subsection a) of article 95, will be entitled to receive temporary disability retirement, according to the programmed withdrawal modality, which is not subject to the commissions established in subsection d) of article 6 8, or they may choose, if they meet the requirements established in subsection a) of article 103, the modality established in said article.

Pension for the death of an active member or a beneficiary of retirement or disability pension under the programmed withdrawal modality

ARTICLE 105. – Those entitled to a pension upon the death of an active member or a beneficiary of a retirement or disability pension under the programmed withdrawal modality may use the balance of the deceased’s respective individual capitalization account to establish their pension benefits. The administrator will verify compliance with these requirements, recognize the benefits, and issue the corresponding certificates.

The pensions will be paid in either a lifetime annuity or a programmed withdrawal. Until an option is chosen, beneficiaries will be subject to the programmed withdrawal option.

1. A life annuity is a type of pension that beneficiaries agree to contract with a retirement insurance company, in which the company undertakes to pay the corresponding benefits, from the moment the contract is signed until their respective deaths or the cessation of the right to a pension for the children.

By opting for this modality, the benefits that result must maintain the same proportions among themselves as those established in article 98.

The life annuity contract will be signed directly by the beneficiaries with the retirement insurance company of their choice, in accordance with the rules and procedures established for this purpose. Once the administrator is notified by the corresponding company, it will be obligated to transfer the funds from the deceased’s individual capitalization account to the company.

2. Programmed withdrawal is the type of pension that beneficiaries receive from the balance of the deceased’s individual capitalization account.

The amount of funds to be withdrawn monthly from the individual capitalization account will be set at a constant purchasing power amount throughout the year, and will result from relating the effective balance of the deceased’s account each year to the actuarial value needed to finance the corresponding benefits.

The Superintendency of Pension and Retirement Fund Administrators will determine the calculation method and technical bases for determining the necessary actuarial value, which must consider, by virtue of the beneficiaries defined in article 53, the payment of the corresponding benefits, which must maintain the same proportions among themselves as those established in article 98.

If there are no beneficiaries of a survivor’s pension, the remaining balance of the individual capitalization account will be paid to the heirs of the deceased as declared by the court.

Pension for the death of a beneficiary of a retirement or disability pension under the modality of a life annuity pension

ARTICLE 106. – Upon the death of a beneficiary of retirement or disability pension under the modality of a life annuity pension, the beneficiaries must notify the retirement insurance company that was paying the respective benefit of the death of the deceased, so that it may begin the payment of the corresponding death pensions.

Pension due to the death of a beneficiary of temporary disability retirement

ARTICLE 107. – Upon the death of a beneficiary of temporary disability retirement, the administrator will make available to the beneficiaries the balance of the deceased’s individual capitalization account and, if applicable, pursuant to the provisions of subsection b) of article 96, the corresponding supplementary capital.

The procedures for granting pension benefits are the same as those established in Article 105.

Other features

ARTICLE 108. – The pension life annuity contracts established in articles 101 and 105 must comply with the minimum guidelines issued jointly by the Superintendency of Insurance of the Nation and the Superintendency of Pension and Retirement Fund Administrators.

These rules must take into account, among other aspects, those inherent to the type of annuities, the life expectancy of the beneficiaries, and the technical interest rate. Pension life annuities will be irrevocable.

Any beneficiary of retirement or permanent disability pension who is receiving their respective benefit under the modality established in subsection b) of article 100 may choose to change to the modality established in subsection a) of the same article.

The regulations will establish the corresponding procedures to be followed in such circumstances.

The provisions of the preceding paragraph shall apply to beneficiaries of survivor’s pensions, provided that they express mutual agreement for the change of modality.

Adjustment for the incorporation of beneficiaries

ARTICLE 109. – If, once the administrator has integrated the corresponding supplementary capital and thus constituted the balance of the individual capitalization account of a deceased member, a person who is entitled to receive a death pension appears and whose status as a beneficiary has not been duly proven, the administrator will proceed to verify their status as such and, once proven, must include them as a pension beneficiary.

Likewise, if, after pension payments have begun, a beneficiary comes forward whose status as such was not duly proven, the survivor’s pensions initially determined must be recalculated to include all beneficiaries. In these cases, the resulting new pensions will be determined based on the remaining balance of the deceased’s individual account or the mathematical reserves maintained by retirement insurance companies, as determined by the regulations. For this purpose, the pensions must be recalculated according to the applicable method, as of the date the new beneficiary claims the benefit. The rights of the new beneficiaries are not retroactive.

Chapter IX – Early and Delayed Retirement

Early retirement

ARTICLE 110. – Members belonging to the capitalization system may retire before reaching the age established in article 47, if they meet the following requirements:

a) To be entitled to a pension equal to or greater than fifty percent (50%) of the respective pension base, referred to in subsection d) of article 101;

b) Be entitled to a pension equal to or greater than two (2) times the amount equivalent to the maximum basic universal benefit.

Members who choose to retire early will not be entitled to the benefits provided for in the Pay-As-You-Go System until they meet the respective requirements.

Deferred retirement

ARTICLE 111. – Any member who, by mutual agreement with their employer if they are employed, decides to remain active after reaching the age established for access to ordinary retirement may:

a) Postpone the start of receiving their ordinary retirement pension. In such case, the payment of benefits corresponding to the Pay-As-You-Go System will be deferred until they cease their activity; likewise, the obligations of the administrators regarding disability retirement and pension for the death of the active member will be suspended, and the obligation to declare and pay the contributions and pension contributions established in Article 11 will be maintained;

b) Access to ordinary retirement benefits.

In such case, the payment of benefits under the Distribution System that may be due will be postponed until the activity ceases, and the obligation to declare and pay the contributions and pension contributions intended for the financing of the Distribution System will be maintained, as established in Article 18.

Chapter X – Tax Treatment

Treatment of mandatory contributions and payments

ARTICLE 112. – The portion of remuneration and income allocated to the payment of pension contributions established in Article 11, corresponding to workers included in the SIJP, will be deductible from the taxable base to be considered by the respective subjects in the income tax.

The social security contributions established in article 11, payable by employers, will constitute, for them, a deductible expense in the income tax.

Treatment of voluntary contributions and agreed deposits

ARTICLE 113. – The voluntary contributions made by each member to the capitalization system will be deductible from the respective income tax base.

Agreed deposits for the capitalization scheme do not constitute remuneration for any legal purpose and will not be considered income of the member for tax purposes. The agreed deposits referred to in Article 57 of this law constitute a deductible expense for income tax purposes for the person making them.

Treatment of fund income

ARTICLE 114. – The increases experienced by the quotas of retirement and pension funds will not constitute income for the purposes of income tax.

Treatment of benefits

ARTICLE 115. – Retirements, disability pensions, survivor’s pensions and other benefits granted in accordance with this law shall be subject to income tax as appropriate.

Treatment of the administrator’s commissions

ARTICLE 116. – The commissions to which the administrator is entitled are exempt from value added tax.

The portion of the commissions allocated to the payment of the obligations established in Article 99 of this law shall not constitute remuneration for the administrator for tax purposes.

Chapter XI – Supervisory and Control Body: Superintendency of Pension and Retirement Fund Administrators

Creation. Mission. Legal type

ARTICLE 117. – The Superintendency of Pension and Retirement Fund Administrators is hereby created.

The Superintendency of Pension Fund Administrators will exercise control over all pension fund administrators, with the functions and powers established in this law and its implementing regulations. The mission of the Superintendency of Pension Fund Administrators is to supervise the strict compliance, by entities involved in the operation of the capitalization system, with this law and the regulations issued thereunder; to prevent any potential non-compliance; and to act swiftly and efficiently when such non-compliance occurs, solely and exclusively safeguarding the interests of individuals enrolled in the Integrated Pension System (SIJP) as contributors or beneficiaries of the capitalization system, ensuring that the implementation of the state guarantee is as cost-effective as possible for public funds.

The Superintendency of Pension and Retirement Fund Administrators is an autonomous entity with functional and financial autonomy, under the jurisdiction of the Ministry of Labor and Social Security of the Nation.

Duties of the Superintendency of Pension and Retirement Fund Administrators

ARTICLE 118. – The duties of the Superintendency of Pension and Retirement Fund Administrators are:

a) To exercise the functions that this law and its regulatory decree assign to the control authority;

b) To issue general and particular resolutions in the cases provided for in this law, its regulatory decree and those that are necessary for its application;

c) To jointly oversee with ANSES the incorporation procedure provided for in article 130 of this law, and the subsequent incorporations and transfers decided by the persons incorporated into the SIJP, in accordance with the principles established in articles 41, 42 and 43, second part;

d) To authorize the operation of the Pension and Retirement Fund Administrators, as prescribed in article 62 of this law, and to keep a register of these entities;

e) Consider the advertising and promotion plans submitted by the administrators, in accordance with the provisions of Article 64;

f) To monitor the correct and timely allocation of contributions to the individual capitalization accounts of the members;

g) Receive complaints from members, for which the provisions of article 13, paragraph a), section 3, will apply where relevant. When the complaint made suggests that contributions and/or pension contributions are being evaded, a copy of the complaint must be sent to ANSES within the following five days;

h) Monitor compliance with the duties of informing the public and members or beneficiaries, as prescribed by articles 65, 66 and other provisions of this law;

i) Verify through inspections whose minimum frequency will be determined by the regulatory decree, the accuracy and truthfulness of the information that the administrators must provide in accordance with the provisions of articles 65, 66 and other provisions of this law;

j) Monitor compliance with the commission system set by each administrator and consider any modifications requested by the administrators in accordance with the procedure set in Article 70;

k) Proceed with the liquidation of pension and retirement fund administrators in the cases of article 72 of this law;

l) Monitor the investments of the resources of retirement and pension funds and the composition of the investment portfolio;

ll) Issue the resolutions regarding the type, means and periodicity of the information that the administrators must provide to the Superintendency of Pension and Retirement Fund Administrators;

m) To oversee the qualifications of the directors, trustees, representatives and managers who are incorporated in such capacity into the administrators, in accordance with the provisions of article 60 of this law, keeping an updated record of personal background of the directors, trustees, representatives and managers of the administrators;

n) To oversee the constitution and maintenance of the entity’s capital;

ñ) Determine the average profitability and commission of the system and monitor the profitability obtained by each administrator;

o) To oversee the establishment, maintenance, operation and application of the fluctuation fund and the reserve requirement, as well as the investment of the resources corresponding to the fluctuation fund and the reserve requirement;

p) To oversee the contracting of group disability and death insurance by the administrators in the manner prescribed by Article 99 and to establish, jointly with the National Superintendency of Insurance, the rules that regulate the group disability and death insurance contract, as well as those that cover the pension life annuity modality and to oversee compliance with the obligations arising from the aforementioned contracts;

q) To oversee the operation of the administrators and the granting of benefits to their members, ensuring the faithful compliance with this law, its regulations and the rules that are consequently issued;

r) To collect and dispose of the funds referred to in Article 122;

rr) Impose on the administrators the sanctions provided for when they do not comply with the legal and regulatory provisions, according to the following procedure;

1. A detailed report of the non-compliance verified by the control authority will be drawn up.

2. The administrator will be given 30 days to submit her defense and produce any evidence she deems necessary to support it.

3. Once this period has expired, the Superintendent of Pension and Retirement Fund Administrators will issue a reasoned resolution, either absolving the administrator or applying the sanction if appropriate.

4. The resolution that applies a sanction to an administrator may be appealed before the National Chamber of Appeals in Commercial Matters of the Federal Capital, or before the federal judge with jurisdiction in commercial matters, depending on whether the administrator’s address is in the Federal Capital or in the interior of the country, within 15 days of notification.

5. If the sanction is a fine, the appeal will only be admissible if, together with the initial submission to the judicial body, proof of payment of the fine amount to the court is provided. The supervisory authority will maintain a record of the sanctions imposed.

s) Draw up a record of every inspection carried out at an administrator or before a third party with whom it operates, a copy of which will be given to the natural or legal person with respect to whom the inspection was carried out;

t) To impose sanctions on administrators by means of a reasoned resolution when they do not comply with legal or regulatory provisions;

u) Publish, on a quarterly basis, a report that will contain the global and statistical information established by the regulatory decree, referring to the evolution of the capitalization system, the authorizations granted to operate as pension fund administrators, the authorizations to administrators revoked, the sanctions applied, and the indication, referring to each administrator, of: share capital, list of directors, representatives, managers and trustees, number of members incorporated into each one, commission scheme, value of the pension fund, reserve, composition of the investments of each fund and all other information established by the regulatory rules.

Powers of the Superintendency of Pension and Retirement Fund Administrators

ARTICLE 119. – For the fulfillment of its duties, the Superintendency of Pension and Retirement Fund Administrators shall have the following powers and responsibilities:

a) To exercise the functions that this law and its regulatory decree assign to the control authority;

b) To issue general and particular resolutions in the cases provided for in this law, its regulatory decree and those that are necessary for its application;

c) Adopt the necessary resolutions to make effective the oversight of each pension fund administrator, take the measures and apply the sanctions provided for in this law and its regulatory norms;

d) Examine all elements pertaining to the operations of the administrators and, in particular, require the general exhibition of the accounting books and supplementary documentation, as well as their correspondence, and conduct cross-checks, audits, and verifications, both related to the administrator and the retirement and pension fund it manages. The administrators are obligated to keep at their headquarters or branches, available to the Superintendency, all elements related to their operations and those of the fund they manage;

e) To request other information that it deems necessary to perform its functions. The Superintendency may require sworn statements regarding specific facts or data. The obligations arising from this paragraph and the preceding one apply to the directors, trustees, representatives, and managers of the administrators and the entities with which it is linked due to the administration of the fund;

f) To require any natural or legal person to provide the information necessary for the fulfillment of its mission, even if they are subject to the control of other state, national, provincial or municipal bodies, in accordance with specific laws, and to exhibit their books of commerce and supplementary documentation to inspectors of the Superintendency, when necessary to determine their situation under the regime of this law or to establish the conditions under which they operate with an authorized administrator, and the duty of secrecy or confidentiality of the information cannot be opposed to the control authority;

g) Attend the meetings of the administrators;

h) To request search warrants and the due and immediate assistance of the public force for the exercise of its functions; to seize the documents and information contained therein by any means for the fulfillment of its oversight tasks; to initiate legal actions and act in any kind of trial as plaintiff or defendant, in criminal trial as plaintiff and to appoint attorneys for these purposes;

i) To enact its own internal regulations, determine its organizational structure and the system for assigning functions to its officials;

j) To appoint, hire, promote, dismiss and sanction its personnel, and to adopt other internal measures that correspond to its operation;

k) It will have full authority to manage its assets and to issue its regulations for purchases and contracts.

Secret of the actions

ARTICLE 120 – Actions taken in the exercise of the oversight provided for in this law are confidential. Data not intended for public release and sworn statements submitted are also confidential. Officials and employees are obligated to maintain the secrecy of these actions outside the performance of their duties. Failure to do so will be considered a serious offense.

Superintendency of Pension and Retirement Fund Administrators. Structure

ARTICLE 121 – The Superintendence of Pension and Retirement Fund Administrators will be in charge of an official appointed by the National Executive Branch with the title of superintendent of pension and retirement fund administrators.

The Superintendency will be staffed with the necessary number of officials and technical-administrative employees to fulfill its functions.

Those disqualified under Article 60 of this law may not serve on the Superintendency of Pension Fund Administrators, without prejudice to current conflict-of-interest rules. They may also not have any interest in pension fund administrators, except for their own interest as members of the Integrated Pension System (SIJP), nor in credit rating agencies.

The remuneration and benefits received by the superintendent, officials and technical-administrative employees of the Superintendency will not be less than the average of the remuneration and benefits received by the directors, managers, senior staff and employees of 50% of the pension fund administrators that best remunerate their staff, according to the equivalencies by categories determined by resolution of the Superintendency.

Financing of the Superintendency of Pension and Retirement Fund Administrators

ARTICLE 122 – The expenses required for the operation of the Superintendency will be financed with:

a) Contributions from pension fund administrators. These contributions will be determined as a percentage to be applied to the monthly amount received by the respective administrators as mandatory contributions;

b) The reimbursement of expenses destined for the medical commissions provided for in article 51 of this document, in accordance with the procedure determined by the regulatory rules;

c) The fines applied in accordance with this law and its regulatory rules;

d) The real estate, furniture and appropriate technical equipment that the national State must provide for its operation.

The budget of the Superintendency will not be part of the national budget.

Superintendent’s Responsibility

ARTICLE 123 – The superintendent will be criminally responsible for the improper actions and omissions he incurs in the exercise of his obligations and duties.

Any official of the Superintendency who, in violation of the duties in his charge, causes harm to a retirement and pension fund or to an administrator thereof, will be criminally responsible for said harm.

Chapter XII State Guarantees

Guarantees

ARTICLE 124 – The State shall guarantee to members of the SIJP belonging to the capitalization system:

a) Compliance with the minimum profitability guarantee on the funds that members or beneficiaries keep invested, when an administrator, having exhausted the mechanisms provided for by law, is unable to fulfill the aforementioned obligation. This guarantee will remain in effect during the period in which members or beneficiaries transfer to a new administrator in accordance with the provisions of Article 72;

b) The integration into the individual capitalization accounts of the corresponding supplementary and recomposition capitals, as well as the payment of any temporary disability withdrawal, in the event of bankruptcy of an administrator and non-compliance by the life insurance company;

c) The payment of retirement benefits, disability pensions, and survivor’s pensions to beneficiaries who have opted for the annuity pension option, in the event that, due to bankruptcy or insolvency proceedings, retirement insurance companies fail to fulfill their obligations under the contracts entered into with members under the conditions established by this law. This circumstance must be jointly certified by the National Superintendency of Insurance and the Superintendency of Pension Fund Administrators. The guarantee referred to in this subsection shall apply only to benefits financed with funds from the capitalization system, and the maximum monthly amount guaranteed for each beneficiary’s benefit shall be equal to five (5) times the equivalent of the maximum basic universal benefit.

Guaranteed minimum income

ARTICLE 125 – The national State guarantees the granting of minimum benefits to members of the SIJP who:

a) Demonstrate compliance with the requirements established in sections a), b) and c) of article 19;

b) calculate a total pension benefit at the time of receiving the benefits that is less than three and two-thirds (3 2/3) times the average mandatory pension contribution referred to in art. 21. Total pension benefit is defined as the sum of the following benefits:

1. Universal basic benefit, as established in art. 20;

2. Compensatory benefit, as established in Article 24;

3. Ordinary retirement, as established in article 47, determining its amount according to the modality established in subsection b) of article 100 or the additional benefit for permanence provided for in article 30;

c) Expressly state their willingness to take advantage of this guarantee.

For the purposes of the aforementioned guarantee, the amount of the basic universal benefit corresponding to the member will be increased by the amount necessary so that, added to the amount of the compensatory benefit, the benefit is equal to three times and two thirds (3 2/3) the average mandatory pension contribution.

The benefit provided by the public pension system, as the sum of the basic universal benefit plus the compensatory benefit, if any, shall in no case be less than forty percent (40%) of the average salary of the economy established by ANSeS; this indicator must be of an official nature published by the National Institute of Statistics and Censuses.

Members who choose to apply the guarantee established in this article will receive their benefit directly from the SUSS.

Guarantee of the additional benefit for remaining with the company

ARTICLE 126. – The State guarantees to members who have exercised the option of article 30 the receipt of the additional benefit for permanence.

Nature of the credits

ARTICLE 127 – In cases where the state guarantee has operated, the State will participate in the bankruptcy of the retirement insurance company for the amount paid and with a general privilege of the same degree as the insured members in accordance with subsection a) of article 54 of law 20.091.

The credit of members insured for the portion not guaranteed by the State will enjoy the same privilege stated in the previous paragraph.

The credits of the administrators against a life insurance company, which originate from the group disability and death insurance contract, will enjoy general privilege in accordance with the provisions of article 270 of the Bankruptcy Law.

Chapter XIII Transitional provisions of the capitalization system

Gradual age system. Ordinary retirement

ARTICLE 128 – For the purposes of fulfilling the age requirement established in article 47 to access ordinary retirement, the following scale will apply:

MEN WOMEN                               

Since the year List of Self-Employed Workers List of Self-Employed Workers        
               Dependency Dependency                     

1994 62 65 57 60               

1996 63 65 58 60               

1998 64 65               

59 60 2001               

65 65 60 60               

2003 65 65 60 60               

2005 65 65 60 60 2007 65 65 60 60               

2009 65 65 60 60               

2011 65 65 60 60              

TITLE IV Validity

Validity

ARTICLE 129. – The provisions of this book shall come into force on the date set by the Executive Branch, which may not be established in a period of less than nine (9) months, nor greater than eighteen (18) months, counted from the promulgation of this law.

Until the date mentioned in the previous paragraph, the legal provisions in force until that time will continue to apply, with the modifications introduced by this law.

Onboarding process

ARTICLE 130. – The regulatory norms shall provide for the procedures, deadlines and modalities that make it possible to incorporate into this regime the persons who on the date of its entry into force are included in it, as well as those of those who exercise the option referred to in article 30.

Financing of the Superintendency

ARTICLE 131. – The expenses required for the fulfillment of the functions of the Superintendency of Pension Fund Administrators during the period between the promulgation of this law and the date of entry into force of this book, will be included in a transitional budget and will be financed with resources from ANSeS.

TITLE V Penalties

Chapter I – Crimes against the integration of funds into the integrated retirement and pension system

Infringements of the duty to inform

ARTICLE 132. – Any employer who, being obligated by the provisions of this law, fails to comply with the obligations established in subsections a), b), e), and i) of Article 12 and of Article 43, second part, hereof, shall be punished with imprisonment from 15 days to one year. The offense shall be constituted when the obligated party fails to comply with the aforementioned duties within thirty (30) days of being notified of the respective formal notice at their actual residence or at the place of their business.

Violation of the duty to act as a withholding or collecting agent, the duty to deposit and evasion of contributions and payments

ARTICLE 133. – The employer’s infractions established in the heading, will be punished in accordance with the provisions of Law 23 771, its modifications and substitutions and the Penal Code.

Chapter II – Crimes against the proper allocation of deposits to the integrated retirement and pension system

Failure to transfer deposits

ARTICLE 134. – The depositary of the contributions and payments who is obligated by this law to transfer them to the administrators of the SIJP regimes and does not transfer them in whole or in part, within the time limits established in this law and its regulatory norms, shall be punished with imprisonment from 2 to 6 years.

Chapter III – Crimes against the freedom of choice of AFJP

ARTICLE 135. – Anyone who, by imposing requirements not contemplated in this law and its regulations for the incorporation or transfer to a pension fund administrator, or by using any other means, prevents the incorporation into one administrator or the transfer to another of a worker compulsorily or voluntarily incorporated into the SIJP (Integrated Pension System), shall be punished with imprisonment from 6 months to 2 years. The same penalty shall be imposed on anyone who incorporates a worker into a AFJP (Pension Fund Administrator) without having the pertinent application signed by the worker or removes the worker from its register of members without observing the requirements of this law and its regulations. The same penalty will be suffered by anyone who, using misleading advertising or designations, or falsifying or inducing error regarding the benefits of the SIJP or of a specific administrator, or making promises of supplementary benefits that do not exist or are prohibited by this law or its regulatory norms, or through promises of payment in cash or any other asset other than the benefits contemplated in this law, or through abuse of trust, or a blank signature, or by using any other abuse, trick or deception, limits in any way the right of the worker to freely choose the pension fund administrator to which he wishes to join.

Anyone who deceives a worker who is required to join the SIJP, by adhering to a service not established in this law or by selling him any other service or product, will be punished with imprisonment from 1 to 4 years.

Chapter IV – Crimes against the duty to inform

Offences against the duty to provide information

ARTICLE 136. – Anyone obligated by this law to provide the information that a Pension Fund Administrator (AFJP) must make available to the public, its members, the National Social Security Administration, and the Superintendency of Pension Fund Administrators, in accordance with the provisions of Articles 65 and 66 of this law, and any other provision derived from it, its implementing decree, or the general or specific resolutions of the oversight bodies, who fails to do so in a timely manner, shall be punished with imprisonment from 6 months to 2 years. The offense shall be established when the obligated party fails to comply with the aforementioned duties within 5 days of being notified of the respective formal notice at their legal address.

False information

ARTICLE 137. – Anyone obligated by this law to provide the information that an AFJP must provide to the public, the affiliate, the National Social Security Administration and the Superintendency of Pension Fund Administrators, in accordance with the provisions of articles 65 and 66 of this law, and any other provision emanating from it, its regulatory decree, the general or particular resolutions of the control bodies, who provides false or misleading information with the purpose of appearing to have a patrimonial, economic or financial situation higher than the real one, both of the administrator and of the fund it manages, shall be punished with imprisonment of 3 to 8 years.

Chapter V – Crimes against a retirement and pension fund

Ratings. Harm

ARTICLE 138. – The person responsible for the rating of financial, banking or securities entities and fixed-term deposits, who, through non-observance of the duties of his position, function or employment, makes an incorrect rating causing harm to a retirement and pension fund, including transitory and fluctuation funds, shall be punished with imprisonment of 4 to 10 years.

Authorizations, determinations, approvals. Harm

ARTICLE 139. – Anyone responsible for the following shall be punished with imprisonment from 4 to 10 years:

a) To authorize the public offering or admit its listing on securities markets that may be subject to investment by retirement and pension funds;

b) Authorize common investment funds that may be subject to investment by retirement and pension funds;

c) Determine the markets that meet the requirements set out in article 78 of this law;

d) Approve the ratings made by the risk rating companies referred to in article 79 of this law;

e) Authorize securities depots and banks for the deposit and custody of investments of retirement and pension funds that, due to non-compliance with the duties in their charge, function or employment, emanating from the laws, decrees or regulatory norms to which they must conform their activity, make an improper authorization, admission, determination or approval, causing harm to a retirement and pension fund, including transitory and fluctuation funds.

Investments. Deposits, custody and control. Loss

ARTICLE 140. – Anyone responsible for making investments in a retirement and pension fund, including temporary and fluctuation funds, or for depositing or safeguarding them, who, due to non-compliance with the duties of their position, function or employment, arising from the laws, decrees or regulatory norms to which their activity must conform, carries out the investments, deposits or custody in an improper manner, causing harm to a fund, shall be punished with imprisonment from 4 to 10 years.

The same penalty will be applied to the person responsible for the control of investments, deposits or custody, who, due to non-compliance with the duties in his charge, function or employment, emanating from the laws, decrees or regulatory norms to which he must conform his activity, carries out the control improperly, causing harm to the fund.

Aggravated offenses. Damage to a fund for one’s own benefit or that of a third party

ARTICLE 141. – Anyone who, committing the offenses specified in this chapter, causes harm to a retirement and pension fund by seeking an undue benefit for himself or for a third party, shall be punished with imprisonment from 5 to 15 years.

Chapter VI – Offenses for non-compliance with obligations

Failure to comply with social security benefits

ARTICLE 142. – Anyone obligated to provide the social security benefits established in this law who fails to make timely and full payments to the beneficiary of said benefits shall be punished with imprisonment for 4 to 10 years. The offense shall be established when the obligated party fails to comply with the aforementioned duties within five days of being notified of the respective demand at their actual residence or place of business.

Chapter VII – Common provisions to Chapters I to VI of this title

Application of the Penal Code and specific criminal laws

ARTICLE 143. – The provisions of this title shall be applicable provided that the conduct is not provided with a greater penalty in the Penal Code or other penal laws.

People of ideal existence

ARTICLE 144. – When the crime has been committed through a legal entity, public or private, the prison sentence will be applied to the public officials, directors, managers, trustees, members of the supervisory board, administrators, agents or representatives, who have intervened in the act, or who through imprudence, negligence or non-observance of the duties in their charge, have caused the act to occur.

Public officials

ARTICLE 145. – The penalty scales will be increased by one third of the minimum and the maximum for the public official who participates in the crimes provided for in this law when he does so in the exercise of his functions.

Disqualification of public officials, notaries and accountants

ARTICLE 146. – Public officials, notaries and accountants, who in violation of the rules of conduct of their position or profession, knowingly report, attest, authorize or certify legal acts, balance sheets, accounting tables or documentation, for the commission of the crimes provided for in this title, will be sanctioned with the penalty corresponding to the crime in which they have participated and with special disqualification for twice the time of the sentence.

Sanctions. Modality of the duty to report

ARTICLE 147. – The procedure for the application of a sanction to be imposed by the relevant control bodies will not be subject to a prior criminal complaint, nor will it be suspended by the processing of the corresponding criminal case.

When the relevant supervisory authority, either on its own initiative or at the request of a private individual, becomes aware of the alleged commission of an offense covered by this title, it shall immediately notify the competent judge, requesting urgent judicial measures if it deems them necessary to ensure the success of the investigation. Within thirty days, it shall submit a report attaching the evidence in its possession and the technical conclusions it has reached.

In cases of complaints filed directly with the judge, without prejudice to urgent measures, the control authority will be given thirty days’ notice for the purposes set out in the previous paragraph.

Real security

ARTICLE 148. – In all cases of the crimes provided for in this law in which release or exemption from imprisonment is appropriate, these will be granted under real security, which, when there is damage to a retirement and pension fund, or to a member, must be correlated and take into account the amount in which, in principle, a retirement fund or the member with the right to a pension benefit appears to be harmed.

Competent Judge

ARTICLE 149. – Federal courts shall have jurisdiction to hear cases concerning crimes defined in this title.

In the Federal Capital, the national criminal economic justice system will have jurisdiction.

Sanctions

ARTICLE 150. – The prison sentence established by this law and any accessory penalties, if applicable, will be imposed without prejudice to the sanctions that the control bodies are authorized to apply.

Chapter VIII – Other sanctions

National Social Security Administration

ARTICLE 151 – Without prejudice to the prison sentences established in this title, the National Social Security Administration will apply to offending employees the fines established in Law 17,250, according to its resolution 748/92 and with the procedures established therein.

Superintendency of Pension and Retirement Fund Administrators

ARTICLE 152 – Without prejudice to the prison sentences established in this title, the Superintendency of Pension Fund Administrators shall apply the following sanctions to the administrators in case of non-compliance with their obligations arising from this law and its regulatory norms:

a) A warning, once only, to each administrator, and if the fault or non-compliance is minor and does not cause harm;

b) Fine, which will be calculated based on multiples of AMPO, the minimum being a multiple of 100 AMPO and the maximum 100,000 AMPO. The maximum amount of the fine may be increased up to five times the amount of the damage caused by the illicit action to the retirement and pension fund, if greater. The amount of the fine will be graduated according to the seriousness of the offense. Directors, administrators, trustees, and managers will be jointly and severally liable for the fines imposed on the administrators when their acts and omissions have caused the event to occur;

c) Disqualification from exercising the direction, administration, management or trusteeship of pension and retirement fund administrators on a permanent or temporary basis;

d) Revocation of the administrator’s authorization to operate.

The sanction may be appealed before the National Criminal Economic Chamber of the Federal Capital or before the Federal Court of Appeals with criminal jurisdiction in the interior of the country, depending on the administrator’s domicile.

In the event of a fine, the penalty may be appealed after the fine has been deposited to the order of the court or tribunal.

Central Bank of the Argentine Republic

ARTICLE 153. – Without prejudice to the prison sentences established in this title, the Central Bank of the Argentine Republic shall apply to the financial entities authorized by it, in case of non-compliance with their obligations arising from this law and its regulatory norms, the sanctions provided for in law 21 526 with the procedures established therein.

National Securities Commission

ARTICLE 154. – Without prejudice to the prison sentences established in this title, the National Securities Commission shall apply to natural or legal persons who, in any capacity, participate in the public offering of securities in case of non-compliance with their obligations arising from this law and its regulatory norms, and the specific ones to which they must adapt their development, the sanctions provided for in law 17 811 with the procedures that it establishes.

Section b) of Article 10 of Law 17.811 is replaced by the following:

b) A fine of one thousand (1000) to five million (5,000,000) pesos, which may be increased up to five times the amount of the benefit obtained or the damage avoided as a consequence of the unlawful action, if it is greater.

National Superintendency of Insurance

ARTICLE 155. – Without prejudice to the prison sentences established in this title, the Superintendency of Insurance of the Nation shall apply to insurance companies, in case of non-compliance with their obligations arising from this law and its regulatory norms, the sanctions provided for in law 20.091 with the procedures that it establishes.

The first paragraph of the second part of Article 31 (non-availability of investments) of Law 20.091 is replaced by the following:

Until the regularization and sanitation measures are fulfilled, the control authority will establish, regarding the investments, the measures provided for in art. 86 of this law.

Section c) of Article 58 of Law 20.091 is replaced by the following:

c) Fine from 0.01 percent to 0.1 percent of the total premiums and surcharges accrued – net of cancellations in the previous financial year, which may not be less than 0.5 percent of the minimum capital required.

The second and third paragraphs of Article 86 of Law 20.091 are replaced by the following:

When the resolution orders the suspension or revocation of the authorization to operate in insurance, the appeals court will order, at the request of the National Superintendency of Insurance, the administration and judicial intervention of the insurer, which will not fall on the control authority.

The National Superintendency of Insurance may order, without a hearing, the prohibition of the insurance entity from carrying out, with respect to its investments, any act of disposal or those of administration that it specifically indicates and from entering into new insurance contracts in the following cases:

a) Situation foreseen in art. 31 of law 20.091, according to the text modified by this law;

b) Decrease in economic or financial capacity, or manifest disproportion between this and the risks retained or deficit in coverage of the commitments assumed with the insured;

c) Infringement of the rules on expenditures and income of funds and on the deposit in custody of public income securities and securities in general;

d) Failure by the insurer to provide the financial statements of advertising, financial position, or of enforceable commitments and liquid claims payable within the regulatory deadlines;

e) Irregularities in the constitution or performance of the administrative and supervisory bodies or of the assemblies;

f) Irregularities in administration or accounting that prevent knowing the entity’s financial situation;

g) Liquidity difficulties that have resulted in delays or non-payment of payments.

To make these measures effective, the National Insurance Superintendency will order the registration of the relevant public entities—national, provincial or municipal—or private entities.

The measures may be lifted to fulfill obligations to insured parties, for reinvestment of the asset in question – in which case, they will remain in effect on the one that comes in as a replacement – or when it is verified that the insurer is in normal operating conditions.

Administrative or judicial appeals filed against the resolution ordering any of these measures will only have a devolutive effect.

The following is added after the first paragraph of Article 87 of Law 20.091:

Even if they are not firm.

BOOK two

Supplementary and transitional provisions

TITLE I-Supplementary Provisions

Supplementary application

ARTICLE 156. – The provisions of laws 18.037 (to 1976) and 18.038 (to 1980) and their complementary provisions, which do not oppose or are incompatible with those of this law, will continue to be applied supplementarily in the cases not provided for in this one, in accordance with the rules that the application authority will dictate on the matter.

Special regimes

ARTICLE 157. – The National Executive Branch is authorized to propose, within one year of the publication of this law, a list of activities that, due to risks to workers or premature exhaustion of their work capacity, or because they constitute special situations, warrant specific legislative treatment. Until the National Executive Branch exercises this power and the National Congress has enacted the corresponding law, the provisions of Law 24,175 remain in force and the deadlines established therein are extended. Likewise, the regulations contained in Decree 1021/74 remain in force.

Workers covered by these special schemes will be entitled to receive the ordinary benefit regardless of the scheme they have chosen, provided they have an age and a number of years of contributions that are no more than 10 years lower in both schemes than those required to access ordinary retirement under the general scheme.

Employers will be required to make an additional deposit into the member’s individual capitalization account of up to five percent (5%) of their salary, in order to allow for greater accumulation of funds in a shorter time. This deposit will be considered equivalent to an agreed-upon deposit.

The determination of the activities included in special regimes must be duly justified, based on technical studies when deemed necessary.

TITLE II – Transitional provisions. Validity

Amendment to Law 18.037 (to 1976)

ARTICLE 158. – Law 18.037 (1976) is amended as follows:

1. The following paragraph is added to Article 13:

The maximum amount of remuneration subject to contributions is established at sixty (60) times the value of the average mandatory pension contribution (AMPO) defined in art. 21 of law 24.241, which will be estimated in the manner indicated in art. 160 of the aforementioned law.

2. The ages provided for in subsection A) of article 28 are set at sixty-two (62) years for men and fifty-seven (57) for women.

3. The minimum service period with contributions established in art. 28, inc. B) is set at twenty-two (22) years.

4. The age provided for in subsection A) of article 31 is set at sixty-seven (67) years.

5. Subsections 1, 2 and 3 of Article 49 are replaced by the following:

1. If all the services counted were in a dependent relationship, the updated remunerations received during the period of ten (10) years immediately prior to the cessation of service will be averaged.

This index must be official, published by the National Institute of Statistics and Censuses (INDEC).

In the case of retirement due to disability, if the member does not prove a minimum of ten (10) years of service, the updated remunerations received during the entire time counted will be averaged.

2. One of the following percentages will be applied to the average obtained according to the previous section:

a) Seventy percent (70%), if at the time of ceasing activity the member does not exceed the minimum age required by this law to obtain ordinary retirement;

b) Seventy-eight percent (78%), if at that time the member did not exceed one (1) year of said age;

c) Eighty percent (80%), if at that time the affiliate does not exceed two (2) years of said age.

d) Eighty-two percent (82%), if at that time the member does not exceed three (3) years of said age. The percentage increases provided for above will not be applicable in the case of readjustment of the benefit or transformation of the benefit of the retiree who continues in activity or returns to it.

3. If dependent and self-employed services are counted successively or simultaneously, the pension will be established by adding the amount resulting from dependent services and the amount corresponding to self-employed services, both in proportion to the time counted for each type of service, in relation to the minimum required to obtain ordinary retirement.

6. The second paragraph of Article 55 is replaced by the following:

The maximum pension amount granted under this law will be that in effect on the date of promulgation of the law establishing the integrated pension system. From that date forward, the maximum amount will be calculated in accordance with Article 160 of said law.

Amendment to Law 18.038 (to 1980)

ARTICLE 159. – Law 18.038 (to 1980) is amended as follows:

a) The minimum service period with contributions established in art. 16, inc. b, is set at twenty-two (22);

b) In art. 37, the expression ‘seventy percent (70%)’ is replaced by ‘sixty percent (60%)’.

Mobility of benefits.

ARTICLE 160. – From the date of entry into force of this law, the mobility of benefits will be carried out in the manner indicated in art. 32. Until the date of validity of Book One of this law, the value of the AMPO will be estimated based on the information provided by the Single Social Security Contribution (CUSS).

The national State guarantees the fulfillment of pension rights acquired prior to the validity of this law.

The adjustment of benefits granted or to be granted by applications of laws prior to this one, which have a mobility formula different from that of the Integrated Retirement and Pension System, will continue to be carried out in accordance with the provisions in force on the date of entry into force of this law.

Law applicable to special situations

ARTICLE 161. – The right of self-employed workers governed by Law 18.038 (to 1980) and its amendments, who on the date of entry into force of this law were entitled to this benefit in accordance with the provisions of the aforementioned law, will be governed by the rules of the same, even if on that date they have not requested the benefit.

The pension rights of the beneficiaries of members who, on the date of entry into force of this law, were entitled to a pension or had the right to it in accordance with the laws in force on that date, will be governed by said laws.

Validity of laws 21.074 and 24.013

ARTICLE 162 – This law does not imply any modification of the provisions of laws 21.074 and 24.013.

Real restructuring of assets

ARTICLE 163. – From the month following the promulgation of this law and the law of privatization of Yacimientos Petrolíferos Fiscales SA, the benefits granted or to be granted by application of the pension laws prior to this one, will be recomposed by the Secretariat of Social Security until reaching in all cases the mobility percentages legally established by them.

Benefits whose mobility is subject to a procedure different from that of the general retirement and pension scheme are excluded from such recomposition.

Method of recomposition of assets

ARTICLE 164. – The recomposition will be carried out applying the rules under which the benefit was or is granted.

Repeal of Law 23.604

ARTICLE 165. – Law 23.604 is hereby repealed. The provisions above are not applicable in cases where, on the date of entry into force of this law, the interested party has expressly exercised before the competent social security agency the right granted by the aforementioned law.

Application of pension debt consolidation bonds

ARTICLE 166. – Holders of pension debt consolidation bonds, including those to be issued pursuant to the provisions of the previous article, may cancel at par the obligations due as of June 30, 1992 in respect of social charges, contributions or payments calculated on the payroll that are the responsibility of the holder and that are owed to the Single Social Security System or to the social works of the public sector.

Ratification of Decree 2741/91

ARTICLE 167. – Decree 2741 of December 26, 1991 is hereby ratified.

Repeal of laws 18.037 and 18.038, their complementary and amending laws.

ARTICLE 168. – Laws 18.037 and 18.038, their complementary and amending provisions, are repealed with the exception of Article 82 and Articles 80 and 81, which are replaced by the following text:

(Articles 80 and 81, Law 18.037): Pension funds recognizing service contributions must transfer to the fund of the agency granting the benefit the pension contributions, employer contributions, and any substitute contributions. The transfer established herein shall include any outstanding charges owed by the beneficiary for the recognized service, for the purpose of their amortization to the granting fund. The transfer must be made in legal tender on a monthly basis and according to the procedure established in the regulations. The granting agency will be any of those included in the reciprocity system under whose system the member has accrued the greatest number of years of service with contributions. If there is an equal number of years of service with contributions, the member may choose the granting agency. Law 18.038, its complementary and amending laws are hereby repealed, with the exception of the provisions of Articles 129, 156 and 160 of the Law of the Integrated System of Retirement and Pensions.

BOOK III National Council of Social Security

Creation and mission

ARTICLE 169. – The National Council of Social Security is hereby created, whose mission will be to ensure the participation of workers, employers and beneficiaries of the Integrated Retirement and Pension System in the development, supervision and improvement of said system.

Homework

ARTICLE 170. – The duties of the National Social Security Council are:

a) Evaluate the fulfillment of the objectives of the oversight and regulation of the Integrated Retirement and Pension System by the National Social Security Administration and the Superintendency of Retirement and Pension Fund Administrators;

b) Evaluate the development of the Integrated Retirement and Pension System;

c) Consider the initiatives and projects submitted to it by the sectors it represents;

d) To propose to the competent authorities rules aimed at correcting deviations in the system and improving its functioning;

e) Any other task related to the fulfillment of its mission.

Powers and duties

ARTICLE 171. – For the fulfillment of its duties, the National Social Security Council shall have the following powers and responsibilities:

a) To request from the control bodies of the Integrated Retirement and Pension System all information that it considers appropriate for the fulfillment of its mission;

b) Report to the competent authorities any breach of duties by officials and control bodies of the Integrated Retirement and Pension System;

c) To carry out, either directly or through third parties, subject to the current contracting regulations for the public sector, the technical studies aimed at determining the evolution of the Integrated Retirement and Pension System;

d) Any other related or necessary for the fulfillment of its mission and duties.

Integration

ARTICLE 172. – The National Social Security Council shall be composed of three (3) representatives of the workers, three (3) representatives of the employers and three (3) representatives of the beneficiaries of the Integrated Retirement and Pension System, designated by the Ministry of Labor and Social Security in accordance with the procedures determined by the regulations.

The Council will be chaired by the Minister of Labor and Social Security, with the Secretary of Social Security acting as vice-chair.

Operating expenses

ARTICLE 173. – The National Social Security Administration will make available to the Council the personnel that it requires for the fulfillment of the tasks assigned in this book.

All other expenses incurred in the establishment and operation of the Council will be charged to ‘General Revenues’.

BOOK IV Insurance Companies

Chapter I – Life Insurance Companies

Group disability and death insurance

ARTICLE 174. – In order to guarantee compliance with the obligations established in articles 95 and 96, the administrators must, by virtue of the provisions of article 99, contract a group disability and death insurance for their members.

The sum insured in this contract will be determined in accordance with the provisions of articles 91, 92, 93, 94, 97 and 98 and the regulatory rules issued for this purpose.

Authorized entities

ARTICLE 175. – The insurance referred to in the previous article shall be intended to cover in full the payment of the administrator’s obligations and may only be subscribed by insurance companies that exclusively limit their purpose to personal insurance included in Chapter III of Law 17,418. These insurance entities may not contract the insurance provided for in Chapter II of this book.

These companies must be expressly authorized by the National Superintendency of Insurance, their corporate name must necessarily contain the expression life insurance, and they will be subject to the provisions of Law 20.091.

Chapter II Retirement Insurance

Retirement insurance

ARTICLE 176. – Retirement insurance is defined as any life insurance coverage that provides, in the event of the insured’s survival beyond the retirement date, the periodic payment of a life annuity; and in the event of the insured’s death prior to that date, the payment of the total premium fund to the beneficiaries named in the policy or to their heirs. The type of life annuity referred to in Article 101 and paragraph 1 of Article 105, known as a pension life annuity, is included within the coverage provided for in this article.

Authorized entities

ARTICLE 177. – The insurance referred to in the previous article may only be entered into by insurance entities that exclusively limit their purpose to this coverage

They may operate in other personal insurance policies but only as complementary to retirement insurance coverage.

They must be expressly authorized by the National Superintendency of Insurance and their corporate name must necessarily contain the expression retirement insurance.

Such entities and the contracts that constitute their object are subject to the provisions of laws 20.91 and 17.418 as long as they are not modified in the present.

Businesses in operation

ARTICLE 178. – Entities already authorized to operate in retirement insurance on the date of entry into force of this law in accordance with General Resolution 19.106 of the Superintendency of Insurance of the Nation shall retain the authorization conferred with the scope with which it was granted, which shall be considered extended to the modalities contemplated in this chapter and regulatory norms.

Chapter III-Common Provisions

Non-compliance and penalties

ARTICLE 179. – In the event of non-compliance with any of the requirements to which the insurance companies referred to in this book are subject, the Superintendency of Insurance of the Nation may order the entity in question to refrain from entering into new contracts and summon it to regularize its situation within thirty (30) days.

Should the observation persist after that time, the National Insurance Superintendency will order the entity to publicly tender, within the non-extendable period of fifteen (15) days, the total transfer of the portfolio.

The National Insurance Superintendency will oversee the transfer process and the award may not exceed thirty (30) days from the call for bids.

If the entity fails to comply with the transfer order, or if the transfer is unsuccessful, the National Superintendency of Insurance will order that policyholders entitled to receive annuities be paid one hundred percent (100%) of the mathematical reserve, and those not entitled to receive annuities be paid at least one hundred percent (100%) of the surrender value, all within the timeframe and under the conditions it establishes. Failure to comply with this provision will result in the forced liquidation of the insurance entity. In such case, the policyholders will be creditors with special privilege over the proceeds from the assets comprising the reserves, with the priority resulting from the order previously stated.

Non-seizability

ARTICLE 180 – The assets of life and retirement insurance entities shall be exempt from attachment to the extent of any obligations they have with their policyholders. This rule shall not apply to attachments ordered in favor of policyholders in the exercise of their rights derived from the insurance contract, nor to those ordered by the National Superintendency of Insurance in the exercise of the powers conferred by Law 20,091.

Approval of plans

ARTICLE 181. – The National Superintendency of Insurance shall establish a system for the automatic approval of the insurance plans provided for in this book. To this end, it shall first define the minimum standards that the technical bases and other technical-contractual elements of the submitted plans must meet, as well as the other conditions that the insurer must satisfy to qualify for the system. For the insurance policies covered by Articles 99, 101, and paragraph 1 of Article 105, the minimum standards to which these contracts must adhere shall be established jointly with the Superintendency of Pension Fund Administrators.

Tax treatment

ARTICLE 182. – Retirement insurance and life insurance entities will be subject to the same tax treatment as administrators in operations related to the administration of investments corresponding to obligations with their insured, their collection of premiums and the payment of benefits.

In calculating the taxable base of the tax provided for in Law 23,760 in its Title I, those assets that correspond to the investment of technical commitments with the insured will not be counted.

The surrender values ​​received by the insured will not be subject to income tax to the extent that they are applied to the purchase of another retirement insurance policy.

BOOK V-Non-contributory benefits

Ages for obtaining non-contributory benefits

ARTICLE 183. – The following ages are established for obtaining the non-contributory benefits provided for in the legal regulations indicated below, with the exception of what is provided in the following article:

                Age Law                  

     13.337, art. 2º, inc. a) 70 years                 

13.478, art.9º, modified by law 70 years                 
              20.267                                                      

          22.430, art. 1º 70 years                 

          23.891, art. 4º 60 years                 

          24.018, art. 3º 65 years                

Age scales

ARTICLE 184. – The ages established in the previous article shall be applied according to the following scale:

                    Ages increasing from;                        

  From 60 to 70 years 60 to 65 years 50 to 60 years     

      1993 67 62 52          

      1994 68 63 54          

      1997 69 64 57          

      2001 70 65 60         

Laws 16.516 and 20.733: Age requirement

ARTICLE 185. – To be entitled to the non-contributory benefit established by laws 16.516 and 20.733, it is a condition to have reached the age of sixty (60) years.

A benefit based on the aforementioned laws may only be obtained, even if the holder has been entitled to more than one prize provided for by said laws.

The provisions of the preceding paragraphs apply to persons who obtain one of the prizes referred to in the laws mentioned from the date of entry into force of this law.

Extension to beneficiaries

ARTICLE 186. – In cases where the laws on non-contributory benefits provide that in the event of the death of the holder, the right granted will extend to the beneficiaries they list, the amount of the benefit for these will be determined in accordance with the provisions of article 98.

Financing of non-contributory benefits

ARTICLE 187. – From the promulgation of this law, the payment of non-contributory benefits, agreed or to be agreed, will be covered with funds from ‘General Revenues’.

BOOK VI – Rules on financing

ARTICLE 188.- To the extent that the collection of social security resources increases, the Executive Branch is empowered to proportionally decrease the tax incidence on labor costs, preserving adequate financing of the pension system.

ARTICLE 189 – When the increase in the funds corresponding to the Nation, in accordance with art. 3, inc. a), of law 23,548 allows it, the Executive Branch may order, in the proportion that said increase represents, that the amount paid as a contribution on behalf of the employer, established by art. 9 of law 18,037, to1976 and its amendment, be deducted totally or partially from them.

ARTICLE 190. – Annually, together with the submission to the Honorable Congress of the Nation of the national administration’s general budget, the Executive Branch shall send a detailed report on the status of the Integrated Retirement and Pension System. This report shall include the financial status of the public pension system, broken down into its various components, as well as the status of the capitalization system and the pension fund administrators. Furthermore, in the case of the public system, financial projections for at least five fiscal years shall be included.

ARTICLE 191. – For the purposes of interpreting this law, the following shall apply:

a) Rules that are not expressly repealed remain in full force and effect;

b) Once the condition established in Article 129 of this law has been met, the references that current legislation makes to Laws 18.037 and 18.038, regarding the concept of remuneration for contributions or contributions linked to said concept, must be understood as made, where relevant, to the provisions of Articles 6 and 11 of this law;

c) References in current legislation to the concept of pension benefits should be understood as referring to the total sum of the benefits received by the beneficiary from both the pay-as-you-go system and the capitalization system;

d) With the exception of the provisions of Article 129, this law shall enter into force at the time of its promulgation, with the exception of Articles 158, 159 and 165, which shall enter into force sixty days after promulgation.

ARTICLE 192. – The bankruptcy law (Law 19.551) of 1984 is amended as follows:

1. The first paragraph of item 8, of article 11, is replaced by the following:

8. Attach the documentation that proves the payment of remuneration and compliance with the provisions on the resource and social security of the personnel in dependent relationship, updated at the time of presentation.

2. The following is incorporated as the second paragraph of item 8 of article 11:

Compliance with the provisions on social security resources must be adjusted to the modalities and conditions established by the Executive Branch in the relevant regulations.

ARTICLE 193. – Workers who have provided services under the direction of an employer covered by the provisions of article 12 and related articles of law 24.013, may prove the years worked with them in the terms of subsection c) of article 19 of this law.

ARTICLE 194. – Communicate, etc.

DECREE 2091/93

Buenos Aires, 10/13/93

Having reviewed Bill No. 24,241 on Pension Reform, dated September 1993 and communicated by the HONORABLE CONGRESS OF THE NATION for the purposes set forth in Article 69 of the NATIONAL CONSTITUTION, and

CONSIDERING:

That paragraphs 1, 2, 3 and 4 of article 27 are superfluous in that they establish a Universal Basic Benefit and a Compensatory Benefit in retirement due to disability and pension due to death of the Public Pension System, given that, in accordance with the provisions of article 28, said amounts must be equivalent to the benefits established by articles 97 and 98 of the bill.

It is noted that there is a contradiction between Article 36, first paragraph of the project and subsections a), b), c), d) and e), and Article 3 of Decree No. 507/93, which modifies Article 2 of Decree No. 2741/91, by which the application, collection, auditing and judicial execution of social security resources, which prior to the cited regulation were under the responsibility of ANSe.S., is transferred to the GENERAL TAX DIRECTORATE.

Regarding the investments permitted with the assets of Retirement and Pension Funds, those listed in subsections o), p) and q) of article 74 deserve reservations because they distort the specific functions of the BANCO DE LA NACION ARGENTINA, as well as those of entities whose primary objective is the construction and financing of housing.

As a corollary to this, it is necessary to observe subsection g) of article 76 insofar as it refers to subsection p) of article 74

It is also noted that the third paragraph of Article 125 contradicts the system of benefit adjustments established by Articles 21, 32, and 160 of the bill based on the AMPO (Average Monthly Pension Contribution) and conditioned by the increase in average individual revenue, by establishing a guaranteed minimum benefit linked to the average wage in the economy. To this end, the bill proposes replacing the adjustment system established by Article 53 of Law No. 18,037, based on a permanent survey of the general wage level conducted by the Social Security Secretariat, with another linked to the personal contributions of those who opt for the capitalization system. Given this precedent, it is not advisable to maintain a differentiated guarantee for the public system based on a criterion other than that adopted by the bill in its entirety. Furthermore, since Article 125 applies to the benefits of both systems—public and capitalization—the guarantee of a benefit equal to three and two-thirds times the average mandatory pension contribution, granted to what the article calls ‘total pension benefit’, is also valid for the former; therefore, the benefit of the public system would be equally protected.

Articles 163 and 164 are also relevant; although the principle of pension indexation is enshrined in Article 14 bis of the National Constitution, these articles contradict the new indexation system established in Articles 21, 32, and 160. Therefore, reference to pension systems under previous laws is inappropriate. This is because the Bill introduces a general indexation system applicable from its effective date, excluding only the so-called special pension systems, which retain the indexation system in effect at that time.

Article 189 stipulates that when permitted by the increase in funds allocated to the Nation by Law No. 23,548, the NATIONAL EXECUTIVE BRANCH may decide that the amount paid as remuneration payable by the employer (Article 9 of Law No. 18,037) ‘be deducted in whole or in part from said funds’. Since this rule does not clearly specify how the deduction should be made, and even less so how it will be subtracted from the revenue attributable to the Nation, it is advisable to examine the aforementioned article.

Therefore, it is appropriate to exercise the power conferred upon the NATIONAL EXECUTIVE POWER by Article 72 of the NATIONAL CONSTITUTION.

Therefore,

THE PRESIDENT OF THE ARGENTINE NATION DECREES:

Article 1 – Paragraphs 1, 2, 3 and 4 of Article 27 of the Bill registered under No. 24,241 are observed.

Art. 2º- Article 36 of the bill registered under No. 24,241 is noted, which states: as well as the collection of the Single Social Security Contribution (CEUSS), which in addition to the concepts that constitute resources of the Distribution Regime, will include the personal contribution of the workers, which will be directed to the Capitalization Regime.

Art.3º – Article 36, paragraphs a), b), c), and e) of the bill registered under number 24.241 is observed.

Article 4 – Note the article 36, penultimate paragraph which says ‘In the exercise of its powers it may request the assistance of the public force, initiate legal actions, report crimes and become a prosecuting party’ of the Bill registered under No. 24,241.

Art.5º – Note the subsections o), p) and q) of article 74 of the Bill registered under number 24.241.

Art. 6º- Subsection g) of article 76 of the Bill registered under number 24.241 is observed insofar as it refers to subsection p) of article 74.

Art. 7º- The third paragraph of article 125 of the Bill registered under number 24.241 is observed.

Article 8 – Article 163 of the Bill registered under number 24,241 is noted.

Article 9 – Article 164 of the Bill registered under number 24,241 is noted.

Art.10º – Article 189 of the Bill registered under number 24,241 is observed.

Article 11 – Communicate, publish, send to the National Directorate of the Official Registry and file.-MENEM.-Enrique O. Rodriguez.-Domingo F. Cavallo.