The request for retirement in Argentina has suffered an increase in age as a result of the Pension Reform Law No. 27,426[1], published in the Official Gazette on December 28, 2017, which amended article No. 252 of the Labor Contract Law No. 20,744 (the LCT), all of which must be specially taken into account by the human resources departments of the companies for the re-elaboration of their policies of voluntary or mandatory retirement of their personnel.

According to the new article No. 252 of the LCT, the notice to retire – which formerly might be given at the age of 65 – may currently be served only when the worker reaches 70 years of age, and provided that the employee meets the requirements necessary to access the Universal Basic Benefit (Prestación Básica Universal, or PBU) established in article No. 17, paragraph a) of Law No. 24,241, as amended.

After the notice, the employment must be kept until the worker obtains the pension benefit and for a maximum period of one year.

The raising of the minimum age is only directed to the employer for the purposes of the request for retire and does not affect the right of the worker to file for the pension benefit before being 70 years of age, as long as he/she meets the relevant conditions.

Once the pension benefit has been granted or the maximum term of one year has expired, the contract of employment is terminated by operation of law, without obligation for the employer to pay the compensation for seniority provided by laws or professional statutes.

Under article No. 253 of the LCT, in case a retired worker returns to provide services for the same employer after awhile, or continue to work without interruption after the enjoyment of the retirement benefit – as now provided by the last paragraph of article No. 253 of the LCT introduced by the Law of Pension Reform No. 27.426 -, and then be dismissed, only the time of service accrued after the termination, or the continuation of the relationship uninterruptedly, will be counted as seniority for the indemnification purposes.

Finally, the Law of Pension Reform No. 27.426, article No. 8, authorizes that, once the worker meets the requirements to access the PBU, the employer may withhold and deposit the worker´s social security contributions, and with respect to employer contributions, pay only those for the National Regime of Welfare Entities of Law No. 23,660, as amended, and the quotas of the Labor Risk Regime of Law No. 24,557, as amended, all of which represents a cost saving.

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Mario Eduardo Castro Sammartino

[1] http://servicios.infoleg.gob.ar/infolegInternet/anexos/305000-309999/305214/norma.htm

For additional information on these or any other issues related to doing business in Argentina, please, sign up for our Legal Blog or contact us at any time. Our publications exclusively express the author´s opinion and do not purport to be legal counsel on any case. Should you need it, you must consult with your trusted lawyer.​

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