The Ministry of Inclusion, Social Security and Migrations informed employers and unions yesterday what would be the supposed impact of raising the period with which the regulatory base of the pension is calculated from 25 to 30 years and being able to discard the 24 worst monthly payments. According to the documentation provided, to which this newspaper has had access, the choice of the 28 best years of contribution out of 30 would expand the regulatory bases of the initial pensions by 0.42% more than the current formula. This very slight increase would already occur in 2050 when the entire extension of the period would be implemented, which would be done progressively starting in 2025. In this way, the impact on the system’s finances would be neutral.
Although this would be an average increase between men and women, since the regulatory bases of pensions –which determine the amount of the benefit– for men would be 0.63% higher compared to a practically non-existent increase of 0. 01% in the case of future retirees.
This difference in favor of men would only be corrected in the case of those women who were entitled to receive the gender gap supplement for having been mothers and having harmed their career as a result; also in the case of designing some other complement to address said gap – a future possibility that also includes the initial proposal made by the ministry to the social partners on Monday -; or by improving the lagoons. In fact, said initial proposal also improves the treatment of gaps for fathers and mothers, raising the minimum contribution base from 50% to 60%, which is included in the base between the 49th and 76th monthly payments without the obligation to contribute.
In the event of receiving said current or future supplement, the improvement for women would be 0.74% and for men the increase would remain the same (0.63%). These calculations were included in the documentation delivered yesterday, which consisted of only two pages and a half, without including the “back room” of the figures with which Social Security makes its calculations, something that the social interlocutors did not like, who demanded more numerical details of their estimates from the government negotiators, according to sources of the negotiation. .
In addition, in their explanation of the impact of this proposal, those responsible for the Escrivá ministry summarize that “although the majority of careers observe very small differences in the amount of the pension, those (careers) that observe large differences (regarding the pension that they would charge with the current formula) are always because they improve”. And they insist that the system they propose “better protects the amounts of pensions for non-linear and less stable contribution careers.” But once again, Social Security did not provide figures or examples of these cases, nor did they quantify their volume over the total system.
Along the same lines, and even increasing the damages on women’s pensions, yesterday the calculation made by the actuaries of the Willis Towers Watson Pensions Observatory (WTW) was made public, estimating a decrease of barely 0.04% on the amount average number of retirement pension registrations, so that the impact on total spending when the transitional period ends will be zero in aggregate terms. Although these analysts also suggest that the , since women would worsen the amount of their initial pension by 0.86%, compared to the increase in the pension of men, which would be 0.44%.
For the experts of this consultancy, it seems difficult to understand the objective pursued with this change in the computable period for calculating the regulatory base, since it has a neutral impact on the system and will not improve its sustainability than what is claimed. Brussels to Spain. As WTW senior consultant Rafael Villanueva explains, “The system proposed with this reform does not improve financial sustainability and hardly influences contributory equity, by ruling out two years of contributions and expanding the integration of gaps without contributions”.
The agreement for the second phase of the pension reform seems to date very unlikely, if not impossible. After the meeting to resume negotiations, on Monday the 12th, employers and unions already came out rejecting Minister Escrivá’s proposal. And yesterday, after a new meeting, the rejection was even greater if possible.
The employers’ president, Antonio Garamendi, ruled out the proposed reform for not making pensions sustainable despite charging the weight of income to companies. For this reason, he called on the parties to “feel very serious and calm” to address it.
While the leader of CC OO, Unai Sordo, asked to take out of the negotiation the extension of the period for calculating the pension. Likewise, despite the fact that the Executive said yesterday that the new formula would have a fiscal impact and will not lower the regulatory bases, for the UGT “the proposal greatly distorts the dialogue on the second part of the agreement and perhaps it is better that the Government withdraw it.” .
#Escrivás #formula #calculate #pension #benefits #men #women