BUENOS AIRES (Reuters) - Argentina’s Congress passed a reform to the pension system early on Tuesday, after days of demonstrations by the bill’s opponents and violent clashes between protesters and police gripped the South American country.

The reform, which is crucial to President Mauricio Macri’s efforts to slash the fiscal deficit and attract investment, changes the formula used to calculate benefits by linking them to consumer prices at a time of lower inflation expectations.

It passed the lower chamber of deputies after an all-night debate session by a vote of 128-116, with two abstentions. The Senate had approved the proposal last month.

The measure has generated fierce criticism from opposition lawmakers and labor unions, who say it will hurt retirees. It was initially slated for debate last Thursday, but the session was suspended after police fired rubber bullets and tear gas at demonstrators outside the capitol.

Macri then promised to decree a one-time bonus payment to the neediest retirees, and the government said pensions would rise by 5 percentage points above inflation in 2018.

But that did not win over demonstrators who took to the streets of the capital Buenos Aires and around the country late on Monday, banging pots and pans and blaring car horns.

Earlier on Monday, protesters outside the capitol threw stones at police, who responded with tear gas and water cannons, while the country’s main union called a 24-hour general strike. [L1N1OI120]

Macri’s market-friendly Cambiemos, or “Let’s Change”, coalition does not have a majority in either house of Congress, even after a strong performance in legislative midterm elections in October. But he managed to cobble together enough votes for the pension reform to pass.

Until now, pension payments had increased in line with tax income and wage hikes, which economists said harmed efforts to slash the fiscal deficit.

Reporting by Luc Cohen and Nicolas Misculin; editing by John Stonestreet