Government and social agents reach an agreement on pensions




The first pension agreement is already a reality. In the absence of ratification by the management bodies of the social partners, employers, unions and the Government have closed today, as ABC advanced, the
last pending fringes
to illuminate the first part of one of the most important reforms demanded by Brussels, that of the pension system. The consensual changes guarantee retirees the revaluation of their payroll with the CPI, but in return they impose strong cuts in voluntary early retirements, which will reach up to 21% if the transition to the system is advanced two years before the legal retirement age .

It’s about aligning the ordinary age and the effective retirement age in a key reform, which will encourage the extension of the working life of Spaniards with the aim of increasing the participation of the elderly in the labor market. At this point, the Government will offer up to 12,000 euros per year to those workers who decide to postpone their retirement and remain active beyond the legal retirement age. The rule will give the worker the option to choose this formula or opt for a 4% increase in the regulatory base of his pension for each of these years that he delays his retirement (currently this incentive is between 2% and 4%). %). They may mix the two possibilities, one part in a single payment and the other as an increase in the life pension

The long-awaited agreement comes, however, amid warnings from experts about its lack of ambition to balance a system doomed to support many more expenses than income due to the aging of the population and the precariousness of the labor market. Escrivá’s strategy of dividing the reform into two phases has in fact raised a tide of criticism for leaving the most urgent and harsh measures for last. Voices such as that of the professor and deputy director of Fedea, Jose Ignacio Conde-Ruiz, they ugly to the Executive last week that it has focused on “the easiest part of the reform.” One of the keys in this regard will be the repeal of the demonized sustainability factor, which was introduced with the 2013 reform of the PP, and which will be replaced by the new intergenerational equity mechanism.

agreement has been practically closed for weeks
, as reported by this newspaper, but the reluctance of the Vice President and Minister of Economy to how the Minister of Social Security had proposed the repeal of the sustainability factor – without the new mechanism being in place before – blocked the announcement and the signature of the main pact of the legislature. Escrivá’s initial plans were to repeal this same year the mechanism introduced in the 2013 reform to adjust payroll to life expectancy, which should have come into force in 2019 and was moved to 2023.

But the final agreement states that the normative text includes the repeal of the factor designed by the PP only when the first part of the reform comes into force, which is expected for January 2022. By then the new formula for intergenerational equity should be operational , although the text of the pre-agreement indicates that it will not begin to take effect until 2027, in full retirement of the ‘baby-boom’ generation. The launch of the firm is expected this week and the plans are to bring the agreement to the council of ministers on July 6.

In a joint statement, CCOO and UGT have highlighted that with the repeal of some inheritances from the 2013 reform “the pension system is returned to the guarantee of sufficiency of the benefits of both current pensioners and future retirees ”. They also highlight the role of the State as a public guarantor of the pension system. And it is that the agreement includes a clause that establishes that annually a transfer will be made through the Budgets of about 2% of GDP (about 21,000 million euros) to guarantee the stability of the system.

“Thus the fulfillment, to date, of the principle of separation of sources is culminated and, from now on, about half of the increase in additional financing that our pension system is expected to need by the year 2050 is guaranteed”, emphasize the unions .

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