The government said the move to nationalise 10 pension funds worth $30bn was aimed at shielding retirees from the global economic turmoil.
Cristina Kirchner, Argentina's president, announced the move a day earlier, saying: "We are sincerely, I believe, at the end of an era at the world level and I believe that what we are doing here today is a strategic decision in this international framework."
The opposition has accused the government of "looting the funds of retirees".
Government debt
Critics say the real reason for the move is that the government desperately needs money to pay off billions of dollars of debt.
"[The government] is desperate for cash, they do not have enough funds to cover their financial needs for 2009 and 2010," Juan O'Donnell, an Argentinian economist, said.
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"[The government] is desperate for cash, they do not have enough funds to cover their financial needs for 2009 and 2010"
Juan O'Donnell, Argentinian economist
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"This is why they tried to fix the situation with programmes like restructuring world debt ... in order to create new credit lines.
"Once they realised that those initiatives were not as attractive as they hoped, they came up with this solution as a desperate last measure."
The plan still needs to be approved by the congress.
The 10 firms to be nationalised administer around $30bn in retirement savings of 53 per cent of Argentinian workers, and take in about $4.6bn each year in new contributions.
Workers complain they have not been informed about how the change will affect them.
"We are 11,000 employees with families, and no one is giving us any explanation," Aida Bergot, an Argentinian worker, said.
Kirchner maintains the move is no different than actions taken by the US and Europe in bailing out failed banks.
"For those people who continue clinging to the neoliberal model ... think about the measures taken in the United States, France or Germany. These are intelligent measures ... taken in the defence of the state," she said.
Eight of the 10 pensions are controlled by private banks. One is a co-operative and another is controlled by state-owned Banco Nacion, the country's most important bank.
Cash crisis
Argentina has already lost $6bn in farming revenue following a fall in the price of agricultural produce.
There is also concern the government will be unable to pay off $22bn in loans that were due to be cleared next year.
If the plan's critics prove correct, it would be the second time Argentina has used workers' savings to help pay government debt.
Al Jazeera's Teresa Bo, reporting from Beunos Aires, said: " Argentinians have vivid memories of the last economic crisis in the early 1990's.
"Then, pensions were state-controlled and many struggled to get their money."
Despite having retirement funds at its disposal, Argentina defaulted on $95bn worth of loans in 2001.
"The hope is now that history doesn't repeat itself," Bo said.