Until the last moment, the Government did contemplate sending a pension reform proposal to Brussels that expressly included an increase from 25 to 35 in the number of years of contributions to calculate the benefit to be received upon reaching retirement. This is stated in the penultimate version of the records that the Executive has sent to the European Commission, to which elDiario.es has had access and which was distributed in the last weeks of 2020. The final version that has been sent to Europe no longer includes this precision, although it does maintain the intention to extend the years of calculation.
The Government sends its pension reform to Brussels without the controversial extension of the calculation period to 35 years
“It is proposed to extend the calculation period for the calculation of the regulatory base of the retirement pension, going from the last 25 years of reference in 2022 to a maximum of 35 years progressively”, the description of the reform assured in its penultimate draft. The text continues: “Contemplating the possibility of choosing the years to be integrated into the regulatory base when this threshold is exceeded, together with a review of the procedure for the integration of gaps.”
This same Wednesday, the Minister of Inclusion, Social Security and Migrations, José Luis Escrivá, has blamed other members of the Government of create a false story on the 35-year extension of the pension calculation. The minister has shown his “bewilderment and even disappointment” at the publication in recent weeks in different media “of a narrative that,” he said, has never been heard from “but has been artificially created from a reality nonexistent”. Escrivá has settled: “Listen to the responsible minister and not to what comes from other places.”
But different government sources had confirmed to elDiario.es recently that the working documents did expressly include the measure. Even the third vice president of the Government, Nadia Calviño, I had recognized him in public. Escrivá himself said in an interview on elDiario.es which was something his ministry contemplated.
An average 6.3% cut
The document now published by this medium confirms that the proposal was drafted and ready to be sent to Brussels. This caused a strong confrontation within the coalition government. United We can have been clearly against increasing the count defended by the PSOE sector because it would mean cutting future pensions that Spaniards will receive.
In fact, the draft of the document sent to Brussels ensures that “the average effect of calculating the pension over a maximum of 35 years instead of 25 will suppose (…) an average reduction of the initial pension of 6.3%, although its impact is not uniform and depends on the specific characteristics of each listing career “. The file It also emphasizes that “the change in the regulatory base from 15 to 22 years in 2019 has had an impact on 52% of the 2019 registrations and the average reduction of the pension has been -3.9%”.
The Minister of Labor, Yolanda Díaz, already warned at the end of 2020 that Unidos Podemos would not support what consider “a cut”. The head of Labor also considered that, if the Government finally defends applying this change, it will find itself quite alone because, she said, it would not have the political support to approve it in Parliament, not even among the parties of the right. “This approach is going to have enormous difficulties,” he declared then.
The Government removes the temporary reference, but maintains the fund of the reform
The pension reform, as well as the renewal of the labor market, were considered as two of the main pitfalls for the two parties of the coalition Government at the beginning of this 2021.
The labor reform that is proposed to Brussels, after many negotiations within the Executive, is limited to what is included in the agreement signed by Pedro Sánchez and Pablo Iglesias a little over a year ago. Regarding pensions, the Government has finally chosen to withdraw the precision of the file that it has sent to Europe in the set of reforms that it proposes to access European reconstruction funds after the pandemic caused by the coronavirus, as reported on Tuesday by the spokesman minister, María Jesús Montero.
Montero said that the document sent to Brussels on the pension reform “does not have any type of alteration with respect to what currently exists” on the calculation of the benefit. However, according to the documentation on the reform sent to the Commission to which elDiario.es has accessed, the file expressly states: “it is proposed to extend and adapt to the current reality of professional careers the period of calculation for the calculation of the regulatory base of the retirement pension contemplating the possibility of choosing the years to be included in the regulatory base ”.
In other words, the intention is to increase the contribution period over which future pensions will be calculated, although it is not specified that it will change from 25 to 35 years. The idea is to make the system more contributory and that future pensions reflect more what each person has contributed during their working life. Extending the computation period usually means an average reduction in future pensions, but there are times when it can be advantageous, especially for people who become unemployed at the end of their working life.