MADRID, 12 Mar. (EUROPA PRESS) –
Government and social agents will meet again tomorrow, at 4:30 p.m., to discuss the pending issues of the second phase of the pension reform after the proposal presented to them last Friday by the Ministry of Inclusion, Social Security and Migrations, with the endorsement of the European Commission and United We Can.
The unions already advanced, after the meeting on Friday, that their general assessment of the Government’s proposal was positive, although they expected more ambition in other aspects. On the other hand, CEOE, Cepyme and ATA expressed their “frontal” opposition to the reform proposed by the Executive, which removes the possibility that the reform will go ahead with the approval of the business and only have that of the CCOO and UGT.
Social Security promised to “send numbers” to the social agents so that they could analyze the system’s sustainability formulas this weekend.
In any case, the general secretaries of both unions hinted at the possibility of an imminent agreement. Thus, the leader of the UGT, Pepe Álvarez, assured that the Executive’s proposal was “extraordinarily positive”, although he showed caution while waiting to read “the small print”.
For his part, the CCOO general secretary, Unai Sordo, also considered an agreement with the Government on the second leg of the pension system reform “possible” after learning of the latest proposal from the portfolio headed by José Luis Escrivá. However, Sordo admitted that the tripartite agreement with the businessmen was “difficult.”
In fact, after the negotiation table on Friday, the Spanish Confederation of Business Organizations (CEOE) issued a statement, together with the Spanish Confederation of Small and Medium Enterprises (Cepyme) and the Association of Self-Employed Workers (ATA), in who expressed his “frontal opposition” to the pension reform proposed by the Government”.
For the businessmen, the reform has a “collection voracity” and a “populist” character, which “will undermine the efforts of the companies in wage negotiations” with the unions.
The Ministry of Inclusion, Social Security and Migrations proposed on Friday changes in the calculation period of the pension so that it is calculated either with the last 25 years of contributions or with 29 years of contributions, from which the two worst may be excluded, therefore, in practice, the calculation in this second case will be 27 years.
In this way, it will be possible to choose between what already exists (last 25 years of contributions) or use a computation period of 29 years, eliminating the two worst years of contributions. In other words, the calculation period will remain at 25 years if it is not more beneficial to take a total of 27 years (29 years minus the two worst).
This dual regime of the computation period will be in force for the next 20 years. The new option that is introduced (29 years excluding two) will be deployed progressively for 12 years from 2026, which will especially benefit workers with irregular careers, as explained to Europa Press by Social Security sources.
Thus, through this new system, the pensioner will be offered both possibilities with the idea of ??applying what is most advantageous for the worker who retires. The objective is that those with more volatile work careers do not see their pension diminished due to having received less income in their last active years.
Sources from the Second Vice Presidency and Unidas Podemos commented that a third of the population will benefit from the 25-year calculation, another third from the 29-2 formula, and another third will not be affected by either of the two formulas.
With the aim of improving the income of the system, the Government’s proposal proposes a “solidarity quota” for the part of the salary that is currently not listed due to exceeding the maximum contribution limit. 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 be applied to salaries greater than 53,946 euros in 2023, the maximum contribution base today in Spain, as pointed out by the sources of the Second Vice Presidency and United We Can. These same sources stressed that it is “a net contribution to the system” and not an override mechanism, so it does not entail a consideration or generate rights.
At the same time, also with the aim of raising the system’s income to face the higher spending that the retirements of the ‘baby boomers’ will imply, the Executive proposes doubling the overprice associated with the Intergenerational Equity Mechanism (MEI). This, which is currently 0.6%, will rise to 1.2% in 2029, at a rate of one tenth per year. In this way, the distribution of this contribution will fall 83.4% on the company and 16.6% on the worker.
Another of the legs that the Government proposes to increase the income of the system is the increase in the maximum bases, which will be done between 2024 and 2050 by adding a fixed amount of 1.2 percentage points to the annual CPI.
For their part, the maximum pensions will be revalued year by year with the annual CPI plus an additional increase of 0.115 cumulative percentage points each year until 2050. From 2050 to 2065 there will be additional increases, although these have not yet been specified.
The Government’s text also proposes an improvement in minimum pensions, as demanded by the unions. What is proposed is something similar to what has been done with the interprofessional minimum wage (SMI): establish a convergence path for minimum contributory pensions to ensure that they reach 60% of the median income, taking as reference the evolution of the minimum pension with a dependent spouse, which between 2024 and 2027 would reach 60% of the median income corresponding to a household of two adults.
For non-contributory pensions, a similar process is established: they will grow until they converge in 2027 with 75% of the poverty threshold calculated for a single-person household, as stated in the Government’s proposals.
In its proposal, the Executive maintains the current gap coverage model (understanding gaps as those months in which there is no obligation to contribute and which are taken into account to calculate pensions), although with improvements for women.
Thus, contribution gaps will be compensated with 100% of the minimum base for the first 48 months (4 years), and with 50% of the minimum base from month 49, adding 100% of the minimum base between the empty month 49 and 60 (up to the fifth year) and 80% of the minimum base between the month 61 and 84 (from the fifth to the seventh year).
Likewise, the Government proposes that the gender gap complement of pensions rise an additional 10% to its annual revaluation in the 2024-2025 biennium.
