The Supreme Court of Buenos Aires has suspended the Banco Provincia pension reform enacted by Vidal

The Supreme Court of Justice of Buenos Aires issued a precautionary measure by which it ordered that the Pension Fund of the Bank of the Province of Buenos Aires I left in abeyance, as of June 1, the application of the mobility scheme for retirees instituted by law 15,008 in 2017, under the government of Marie Eugenie Vidalthat the reduction in the collection of retirement assets in this sector was established from 82% to 75%, in addition to an increase in the retirement age for women.

The modification of pensions drawn up by the Governor was established by Law 15,008 and generated a series of amparo appeals alleging the unconstitutionality of the norm, within which that promoted by the Banking Association, Permanent Assembly of Banco Provincia Pensioners and Union of Banco Provincia Pensioners.

“The wound of pension rights for the protection of which measures are taken it focuses on the – at first glance – unspeakable replacement of the mobility regime. Thus, the question corresponds to a constitutional offence, objective and not dependent on the peculiarities of the context of its application. The contested provisions have a full impact on the essential core of the sensitive legal assets belonging to the group of persons already indicated, ”said the unanimous decision of the highest court.

Before validating the action brought, the attorney general of the province had described the contested mobility plan as a “regressive” provision infringing the rights of retirees. In turn, the Supreme Court, when evaluating the action, advocated the sanction of a new law that corrects the defects of that promoted by Marie Eugenie Vidalwhose purpose was to solve the sustainability of the pension fund in a system that includes 15,000 retirees and 10,000 active Banco Provincia.

In this context, during the study of the preconditions required to issue the precautionary measure requested, the judges specified: “the previously detailed elements add weight factors to consider the prima facie likelihood of challenging the rules relating to mobility and to the determination of having (…), in safeguarding special protection rights due to their nutritional nature, corresponding to a vulnerable group such as the elderly”.

“For the sole purpose of highlighting some of these factors, it should be noted that the following elements converge in this case: (i) the asset update mechanism, which is in itself objectionable as it leaves its absolute determination between in the hands of an authority other than the provincial, alienating the legislative competence of the Province and ignoring the substitutive nature of benefits in relation to remuneration in activity; ii) the application of this mechanism has produced a deduction in the amount of the final credit of retirees or pensioners of the Caja del Banco, corresponding to December 2022, of approximately 30%”.

And they added: “iii) the cumulative decline since the entry into force of Law 15,008 (January 2018) until December 2022, is more than 40%; iv) the fall in the amount of benefits continued and was aggravated by the reforms introduced in the national ordinance from 2019, which shows prima facie the breakdown of the proportional relationship between the remuneration of the Bank’s assets and the assets of liabilities; v) the demonstrations in favor of the need to restore the rights of pensioners affected by Law 15.008, emanating from the Attorney General, as well as from the General Councilor of the Government, agreed to oppose the mobility provided for by this regulation”.

In turn, emphasizing the treatment of a new legal regime, the court took into account the time elapsed since the enactment of the norm and the start of legal disputes, as well as the recent loss of “parliamentary status ” Bill. by Axel Kicillof due to the political conflict in the Provincial Legislative Assembly, where the Governor has pledged to Sergius Palace -general secretary of the Bank- to deal with a new bill, while the opposition closed in the refusal to stop his proposal.

In this context, the highest court expressed: “There is an urgent need (…) to urge the Honorable Legislature to give priority to its efforts to seek the agreements necessary to achieve a lasting and legal legislative solution to the during the current parliamentary year.” compatible with the constitutional order, in accordance with the principles deriving therefrom.

Finally, when defining the scope of application of the precautionary origin, they argued that “the granting (…) does not seriously affect the general interest” and then specified that ” the recognition of mobility must be ordered with effects towards the future “and that the preventive recognition will be conferred and implemented in a sequential and progressive manner, privileging the age, disability or serious illness of the beneficiaries”.

The current law – which will suspend its application from June 1st – and which governs the Retirement and Retirement Fund for bank employees – sets the retirement age at 65 for men and women and consolidates 75% of the credit of pension instead of the previous 82%, which led to more than 5,000 court injunctions.

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