May 11, 2021

The Fiscal Authority asks to delay the real retirement age to calculate the pension with the most years of contributions | Economy

The Fiscal Authority asks to delay the real retirement age to calculate the pension with the most years of contributions | Economy


The Tax Authority believes that the constant news about the financial health of Social Security introduces a lot of uncertainty about the future of pensions and distorts the necessary debate about its financial and social sustainability. To solve this point, he asks that the gap between the expenses and the contributions be paid soon with resources from the Treasury. Then he proposes short-term measures to finance this hole and in the medium and long term that translate into adjustments: to push the delay of the real (not the legal) age of retirement from the current 62.7 to 64.5 years and increase the period which is taken to calculate the pension.

Once the reform of 2013 has fallen, the Fiscal Authority (Airef) notes that the mechanism that ensured the long-term financial sustainability of the system has disappeared. This requires action as the structural deficit of the pension system is equivalent to 1.5% of GDP, according to the document that contains his opinion on the financial future of Social Security, which assumes that pensions will maintain their purchasing power after the repeal of the 2013 revaluation index and as if the sustainability factor created in the same reform were maintained.

In this document, the demographic forecasts of the Airef appear, more optimistic than the projections of other organizations such as the INE or Eurostat. And they are in two ways. On the birth rate, the fiscal regulator points out that the birth rate would grow to 1.9 children per woman.

So that this deficit does not become entangled and end up by increasing pension spending from around 11% of current GDP to 17%, the fiscal authority asks that the pension reform of 2011 be deepened, which delayed the legal retirement age from 65 to 67 years old. In addition to this star measure, that reform fixed an increase in the computing period from 15 to 25 years in a transitory period that is now underway and will end in 2022. In silver, that increase does not stop and that it continues to grow until Take it to the whole working life.

It also asks the Airef to take measures to delay the real retirement age, not the legal one. This means that the fiscal watchman claims that the access to early retirement is retired in order to be able to close the differential between the theoretically, legal limit and the early withdrawal permitted by the exceptions of the system.

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