The International Monetary Fund (IMF) has warned that updating pensions according to the CPI, as recommended by the Toledo Pact, could "endanger the financial sustainability" of thepublic pension system, and affirms that this 'ad hoc' measure can not be carried out if it is not part of an "integral" reform package.
The IMF technicians, who have visited Spain in the framework of their annual review of the economy, known as 'Article IV', warn that thisrecommendation of the Toledo Pact"should not be translated into legislative measures that are not part of a comprehensive package, an ad hoc adjustment of benefits could jeopardize the financial sustainability of the system," they warn.
In particular, the international organization calculates that linking the revaluation of pensions to inflation on a permanent basis would add an approximate cost ofbetween 3% and 4% of GDPto the disbursement for pensions by 2050, according to the current demographic and macroeconomic forecasts.
According to the IMF, an increase "of such magnitude" in structural spending must be "counteracted" by other structural measures and cites, among them, theincrease in the minimum pricefor self-employed workers and the maximum income subject to quotation, as well as directly linking the legal age ofretirement to life expectancy. "We need a package of measures on pensions that is sustainable and comprehensive to alleviate the tensions that afflict the system," he reiterates.
Reduction of future pensions
Likewise, it warns that unless there is a "full correspondence" between the increase in income and the additional expense foreseen, a "future reduction" of pensions, even if it is "moderate", can not be avoided.asks the government "transparency"so that future retirees can make informed decisions about their work life and savings.
The IMF adds that for the future, the aging of the population means that the pension system will face the challenge ofless contributors will have to finance a growing number of retirees. "The past reforms responded with financially appropriate measures to relieve pressure on the pension system, but the expected reduction in future benefits has called into question the social acceptability of the reforms," he admits.