Four years of intermittent negotiations have resulted in 22 recommendations in the Toledo Pact which, in essence, reaffirm the distribution system in its current configuration. The consensus reached is the germ of the next pension reform that the government already negotiates in social dialogue. These are the main points:
23,000 million charged to taxes
The Pact is committed to advancing in the separation of financing sources, so that contributions are increasingly focused on paying retirement, disability and widowhood pensions. The proposal is that paternity / maternity benefits, the supplement in the retirement pensions of women who have been mothers or discounts in contributions to boost employment (flat rates) be paid with taxes. The Minister of Social Security, Jose Luis Escrivá, puts these improper expenses at 23,000 million. According to the Budget Plan sent to Brussels, in 2021 the Government would assume with taxes 11,000 million of that invoice. The roadmap places the end of the process in 2023.
Retirement incentives beyond the legal age
The Pact has come to the conclusion that “the age of effective exit from the labor market should be as close as possible to the ordinary age”. Escrivá wants to do so by discouraging early retirement (around 64 years of age) and encouraging retirement beyond the legal age.
Congress has incorporated a petition to the Social Security to analyze the situation of workers with long contribution careers who lose their jobs and are forced to retire early, with the corresponding reduction in pension. The door opens to choose the best years for retirement to stop punishing this group.
«The annual revaluation of pensions based on to real CPI it is presented as the mechanism that has to serve to preserve the purchasing power of pensions “, says the agreement reached. However, it is also recognized that “the current revaluation mechanism (only the IPC) does not enjoy sufficient political and social consensus.” The calculation process must now be determined.
Encourage employment plans
It is recommended to stimulate private savings to complement the public pension. The Commission defends “systems supported within the framework of collective bargaining, employment». It is a model based on the Basque social welfare entities, a system born of social dialogue that has managed to implement savings for retirement in this region. Regarding individual plans, it is stated: “The management of these mechanisms must be more transparent than it has been so far, so that the administration costs by the promoter entities do not entail negative returns for savers. They advocate regulating “more intense formulas for the protection of savings invested in this type of complementary systems.”
As reported by ABC, overwhelming has been the rejection of the academic world to the reduction from 8,000 to 2,000 euros of the maximum contribution to individual plans, included in the 2021 Budgets. A measure defended by José Luis Escrivá.
Income contribution for the self-employed
The Commission agrees to take steps towards a contribution according to your income for this group. This negotiation, at the request of the PP, will be carried out within the social dialogue.
Quotation gaps in women
The Toledo Pact calls for “structural measures, both in labor matters and in the specific area of Social Security, referring to the configuration of the system itself and the form of access to benefits.” They propose five points on which to advance: family care and professional careers, equal pay, contribution gaps, part-time employment and sufficient minimum pensions.
The Pact notes the difficulties of this group to access a job and the “discredit suffered by Social Security” among them.