Argentina Labor Assistance Fund regulation

Argentina is implementing the Labor Assistance Fund (FAL), a component of the Labor Modernization Law designed to cover obligations arising from employment terminations.

Initially, the National Securities Commission (CNV) opened a public consultation period to establish the regulatory framework for the FAL. The proposal outlined that funds would be financed by employer contributions, held in individual accounts, and treated as non-transferable and non-seizable assets. The CNV proposed managing these resources through mutual funds or financial trusts, with permitted investments including government debt, bank deposits, and private negotiable obligations.

Following this, the Ministry of Economy issued Resolution 1276/2026 to regulate specific investment limits. While the resolution sets exposure caps on provincial debt, bank deposits, and dollar-linked assets, it does not limit investments in National Treasury securities, potentially allowing up to 100% of the fund to be invested in national government debt.

The fund is scheduled to begin operations on November 1st. Contributions will be collected monthly via ARCA, with large companies required to contribute 1% of their taxable payroll and micro, small, and medium-sized enterprises (MSMEs) required to contribute 2.5%. These rates are subject to adjustment by the Executive Branch.