Updates on Labor Assistance Funds: Regulatory Harmonization between Law 27,802 (Title II), Decree 408/2026, and CNV Resolution 1276/2026 (Official Gazette Aug 12, 2024)
It is worth recalling that Law 27,802 on Labor Modernization introduced the Labor Assistance Funds (FAL, for its Spanish acronym), which factually constituted one of the most disruptive changes in Argentina’s severance compensation culture.
The main objective is to replace the payment of labor severance payouts with a fund that redirects employer contributions into a reserve and investment fund, ensuring that indemnity payments no longer constitute an unforeseen contingency.
Considering that Articles 59 and 62 of Law 27,802 included on Labor Modernization and Decree 408/2026, FAL requires an individual, ring-fenced employer account dedicated to registering contributions made under the FAL framework—which shall be a separate, independent, inalienable, and unseizable asset pool— Likewise, Decree 408/2026 regulated several aspects of the law, establishing that authorized entities are those approved by the National Securities Commission (CNV). These entities will be responsible for managing and investing FAL resources, as well as safeguarding them through Mutual Funds and Financial Trusts.
CNV Resolution 1276/2026 now sets the limits and conditions that these entities must observe when investing the resources.
For the investment of FAL resources, entities must ensure fund safety, a minimum liquidity level of 10%, diversification, preservation of committed amounts, and proper portfolio asset management relative to obligations.
Instruments Contemplated under the Regulation (CNV Resolution 1276/2026):
- National Government Debt;
- Provincial Debt or Autonomous City of Buenos Aires Debt;
- Bank Deposits (entities authorized by the Central Bank of the Republic of Argentina –
BCRA); - Corporate Bonds issued in Argentina by private entities.
Instruments with yields linked, fully or partially, to foreign exchange rate movements, including dual-currency bonds.
Authorized Entities must maintain at least 10% of the FAL’s total assets invested in high- liquidity, low-market-risk assets, such as demand deposits, early-terminable time deposits, among others.
Assets comprising the FAL portfolios must be settled and paid in Argentine Pesos.