Madrid (EFE).- Pension reform which the Spanish government presented to social agents includes a solidarity quota in the contributions of the highest salaries, doubling the mechanism of intergenerational equality (MEI) and the possibility of choosing between the current accounting period for the calculation of the pension or its extension.
The reform, agreed with Brussels and within the coalition government, It is part of the milestones dedicated to unlocking the new disbursement of European funds and focuses on ensuring the sustainability of the system through various measures to strengthen income.
This last block joins the package of measures agreed in July 2021 and that, along with other changes, it once again linked the revaluation of pensions with inflation.
These are some keys to reform to which the Government is believed to be able to add trade unions, since employers refuse to increase social contributions.
A “double accounting period regime” was established. for the next 20 years which will allow pensioners to choose between keeping the 25 years of contribution service currently taken into account for the calculation of the initial pension or counting 29 years, with the possibility of discarding 2, which leaves that period at 27 de facto years.
According to sources from Ministry of Inclusionthe new extension and drop-off option will be phased in over 12 years, starting in 2026, “with the aim of benefiting workers with irregular careers.”
The accounting period was one of the main stumbling blocks in the negotiationssince both the trade unions and the Podemos movement were against its expansion.
To try to progress reducing the gender gap in pensionstwo measures are introduced.
To begin with, regarding the coverage of non-contributory periods, the so-called gaps, it is argued that differences in contributions are compensated with 100% of the minimum base the first 4 years and with 50% of the minimum base from the 49th month.
To this is added, for working women, 100% of the minimum base until the age of five and 80% of the minimum base from the fifth to the seventh year.
That is also collected supplementing the gender gap in pensions -currently set at 30.40 euros per month for each child- will have an increase of 10% during 2024 and 2025 with an annual revaluation determined in accordance with the increase in pensions.
On the income side, the reform foresees several measures starting from an increase in the prices of maximum baseswhich will be done between 2024 and 2050 by adding a fixed amount of 1.2 percentage points to the annual CPI amount.
Maximum pensions will also be revalued from year to yearwith the annual amount of CPI plus an additional increase of 0.0115 cumulative percentage points each year until 2050. From 2050 to 2065, there will be additional increases.
Source: Panama America
I am Jason Root, author with 24 Instant News. I specialize in the Economy section, and have been writing for this sector for the past three years. My work focuses on the latest economic developments around the world and how these developments impact businesses and people’s lives. I also write about current trends in economics, business strategies and investments.
