The Ministry of Inclusion and Social Security radically changed its strategy in pension reform when it saw that no political actor supported the approach of extending the calculation period, even if it allowed the two worst exercises to be deleted. "This made us rethink how to deal with the matter", indicate ministry sources. The difficulty is that with the system finally agreed, which combines the current 25 years with the option of 29 years deleting the two worst years, the formula is no longer fiscally neutral and a larger adjustment must be assumed.
Added to this is the arrival of the baby boom generation in the 2030s and 2040s, the increase in minimum pensions and the reduction of the gender gap. "If we don't want cuts, we had to look for alternative formulas", add these sources. They discarded the path of reform of the Popular Party government in 2013, because they say that "it was a financially sustainable, but socially unsustainable reform", and they acted with an increase in income through the three known paths: delimitation of the maximum bases, increase of the Intergenerational Equity mechanism (MEI) and introduction of the solidarity quota.
A set of measures that, according to the Minister of Inclusion and Social Security, José Luis Escrivá, will allow the pension reform to remain there for many years because "it is well done" and, moreover, it has the support of Brussels. Following the criticism of the CEOE and the warnings of the PP that it will change it if it reaches the government, Escrivá replies that "it is a reform for many years and it brings a lot of tranquility and certainty to pensioners". He said this when he presented the reform after it was approved by the Council of Ministers yesterday.
He presented it at the same time that support from political forces was being added to the reform in exchange for private concessions, specifically with PDECat he agreed to introduce the principle of progressivity to the solidarity quota, so that three sections are established different depending on salary, and with Bildu it was an increase in widow's pensions.
Regarding the solidarity contribution, which was previously a percentage that would reach 6% in 2045 for the part of the salary that exceeds the maximum contribution base (currently 4,495 euros per month), now this percentage it is distributed in three sections, depending on the level of income. The percentages will be 5.5%, 6% and 7%. The final result does not change, but the burden on each group does.
On the other hand, widowhood pensions will rise by 17% in four years in the case of individuals, and by 30% in those with a dependent spouse. It is one of the modifications introduced in the reform following a pact between Bildu and the central government. The change was already included in the last draft that was distributed to social agents on Wednesday.
Specifically, these pensions will increase, as early as 2024, by 40 euros per month for individual pensions and 126 euros for widowhood pensions with a dependent spouse. The increase implies an increase of between 1,775 and 3,800 euros over four years. In a statement, Bildu states that the agreement will mean that "no widow's pension will be below the poverty line".
On the other hand, Escrivá specified that the so-called pension piggy bank, the reserve fund that will fuel the MEI, will add up to between 120,000 and 130,000 million at the beginning of the decade of 2040. It is a savings that will be used to be disbursed gradually from from 2032, to overcome the additional effort that the greater number of pensioners will require of the system until 2050.
From the Ministry of Inclusion, they insist on the pyramid effect of the arrival of the baby boomers in retirement, which will cause such an accelerated increase in spending as well as a fall at the same rate a decade or two later.