Government and trade unions to meet today with employers’ NO to pension system reform proposals


The Government and social partners will meet again today at 4.30 p.m. to discuss the pending issues of the second phase of the pension reform following the proposal presented last Friday by the Ministry of Inclusion, Social Security and Migration, with the backing of the European Commission and Unidas Podemos. This is a reform that the employers’ association opposes head-on because it is “populist” and means “voracious tax collection”, given that it increases social contributions, i.e. the costs of work in a country ravaged by unemployment, and does not make any adjustments in costs and expenses.

On Friday, the Ministry of Inclusion, Social Security and Migration proposed changes to the pension calculation period so that the pension is calculated either according to the last 25 years of contributions or the last 29 years, from which the worst two can be excluded, so that in practice the calculation in this second case will be based on 27 years’ worth of contributions.

This dual regime of the qualifying period will be in force for the next 20 years. The new option introduced (29 years excluding two) will be progressively deployed over 12 years from 2026, which will particularly benefit workers with irregular careers, according to Social Security sources.

With the aim of improving the system’s income, the government’s proposal proposes a “solidarity quota” for the part of the salary that currently does not pay contributions because it exceeds the maximum contribution ceiling. This will be 1% in 2025 and will increase at a rate of 0.25 points per year until it reaches 6% in 2045.

The quota will only apply to salaries above 53,946 euros in 2023, the maximum contribution base in Spain today, as pointed out by sources from the Second Vice-Presidency and Unidas Podemos. These same sources stressed that it is “a net contribution to the system” and not a capping mechanism, so it does not entail a consideration or generate rights.

At the same time, also with the aim of increasing the system’s income to cope with the higher expenditure that the baby boomers’ retirements will entail, the Executive proposes doubling the surcharge associated with the Intergenerational Equity Mechanism (MEI). This, which currently stands at 0.6%, will rise to 1.2% in 2029, at a rate of one tenth of a percentage point per year. In this way, 83.4% of this contribution will correspond to the company and 16.6% to the worker.

Another of the government’s proposals to raise the system’s income is the increase in the maximum bases, which will be made between 2024 and 2050 by adding a fixed amount of 1.2 percentage points to the annual CPI.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.