Experts are finally reaching an agreement on how to overhaul Spain’s pension system, one of the country’s great ongoing reforms after labor, healthcare and education. Specifically, they agree on the so-called “sustainability factor,” which aims to make the pension scheme viable in the long run despite an ageing population and outlays that will soon outpace contributions.
The report that a government-appointed committee will have on its table for a final review on Monday recommends that changes become applicable as of next year, rather than 19 years from now as stipulated in the 2011 reform. It is a sign of the government’s sense of urgency over Brussels’ demands for more austerity measures
The report contemplates two paths of adjustment: one for current and future pensioners, adjusting annual pension amounts to public revenues and expenditures and ending the link to rises in the consumer price index; another for future retirees, tying their pension calculations to life expectancy.
The report, to which EL PAÍS has had access, already has support among the majority of the committee members.
However, it does contemplate two possible scenarios: either implementing the changes progressively between 2014 and 2019, or waiting until 2019 to begin. But the majority position is clear: “The committee is in favor of early implementation,” reads the text.
Brussels is demanding that the sustainability factor of the pension system go into effect before 2032, and it also feels that the reforms undertaken last year are a step in the right direction but are still insufficient.
Although the expert committee is not recommending early implementation of the new retirement age, 67 (now set to go into effect in 2027), the report’s adjustments will likely mean lower pensions for retirees in the future.