In a move to protect workers’ pensions from the global financial crisis, Argentina has nationalized about $25 billion in pension funds.
Argentina’s private pension funds were created in 1994, partly to encourage investment in local capital markets. Consequently, the funds—and workers’ retirement security—were subject to fluctuations in the stock markets. The public system will guarantee a set amount to be paid to retirees despite the floundering of the capitalist markets.
Opponents of the nationalization accused Argentine President Cristina Fernández de Kirchner of “expropriation,” but at least one oponent, Gerardo Morales, agreed that the privatization of pension funds only served to “take money from the workers.” More than two-thirds of the 65 senators present voted for nationalization.
The funds, which cover 9.5 million workers, lost around $8.1 million between October 2007 and October 2008—an amount corresponding to 17.5 percent of their worth. This year alone, the global financial crisis has claimed $4 trillion from pension funds worldwide.
