{"id":3953,"date":"2021-11-19T08:16:13","date_gmt":"2021-11-19T08:16:13","guid":{"rendered":"https:\/\/dev.grupoperseo.com\/?p=3953"},"modified":"2025-03-21T11:25:09","modified_gmt":"2025-03-21T11:25:09","slug":"una-reforma-inaplazable-de-nuestro-sistema-de-pensiones","status":"publish","type":"post","link":"https:\/\/grupoperseo.com\/en\/2021\/11\/19\/una-reforma-inaplazable-de-nuestro-sistema-de-pensiones\/","title":{"rendered":"An urgent reform of our pension system"},"content":{"rendered":"
\n\t
\n\t\t
\n\t\t\t

Document<\/h1>\n

Marqu\u00e9s de Villamagna 3, 11\u00ba<\/strong>
\nT: (+34) 917 373 200<\/strong>
\n28001 Madrid<\/strong>
\nwww.circulodeempresarios.org<\/a><\/p>\n

Document, Madrid, November 2021<\/strong><\/p>\n

\n

An urgent reform of our pension system<\/h1>\n

An efficient and sustainable pension system must respect a series of basic principles: contributivity (proportionality between contributions and benefits), equity, intergenerational solidarity, sufficiency, and financial balance. In the case of Spain, these principles were defined, at the time, with broad consensus among political parties, in what would become known as the Toledo Pact.<\/p>\n

Although the Spanish system worked correctly in the past, demographic and social evolution, particularly the aging population and the reduction in birth rates, along with certain recent political decisions, have eroded its foundations and threatened its sustainability. Thus, the evolution of the dependency ratio and the progressive increase in the benefit ratio would explain more than 90% of the increase in pension expenses. Since 2010, Social Security expenses have exceeded revenues, and the gap has progressively widened, draining the Reserve Fund and generating a debt that, in the third quarter of 2021, amounted to 91.855 billion euros, or 7.9% of GDP.<\/p>\n

Following the significant reforms approved in 2013, which delayed the retirement age, increased the calculation period, introduced the sustainability factor, and approved a new pension revaluation mechanism, the most recent reforms have consisted, in a first phase, of shifting part of the system's expenses to the General State Budget, reinstating pension revaluation in line with the CPI, or eliminating the sustainability factor. In the second phase, an alternative intergenerational equity mechanism has been proposed, agreed with the unions but without the support of employers, which does not improve the sustainability or equity of the pension system. These are partial measures, some of which even reverse previous reforms, which again, and to a greater extent, threaten the system's sustainability.<\/p>\n

It is essential and urgent, therefore, to transform the system with a long-term vision to ensure its sustainability, balance, efficiency, and respect for intergenerational solidarity.<\/p>\n

The implementation of an individual notional accounts system would be a solution to this problem. It is a pay-as-you-go system with defined contributions that establishes actuarial balance between contributions and pensions, already successfully implemented in countries around us. This model, combined with a delay in the retirement age, would ensure the system's sustainability after a necessary transition period. It would also provide citizens with a projection of their future pension level, increasing transparency and trust in the system, offering greater freedom to decide on the duration of their active life, and incentivizing delays in their retirement age.<\/p>\n

Thus, with the goal of achieving actuarial balance and maintaining the current level of public pension benefits in Spain, providing citizens with a pension equivalent to 2.5 times their contributions, the retirement age should be increased to 70 years. A retirement window between 68 and 72 years would be offered, with a lower pension for those retiring before 70 and a higher pension for those retiring later, allowing citizens to plan the timing of their retirement and the amount of their pension.<\/p>\n

In parallel, complementary financing for retirement from private savings should be promoted, such as company pension plans, individual savings plans, reverse mortgages, and the sale of bare ownership, through tax incentives and other support measures. The establishment of an \u201cAustrian backpack\u201d model, which the Circle of Entrepreneurs proposes as a key component of labor reform, would also help increase the amount of savings for retirement while simultaneously improving the availability of financial resources needed for economic growth and business investment.<\/p>\n

Any major reform affecting Social Security, as an essential component of the Welfare State, to ensure its sustainability in the medium and long term, must result from the highest possible level of parliamentary consensus, preferably with agreement between economic and social agents, and with a forward-looking vision, putting the general interest ahead of electoral and short-term interests. It is profoundly unsolidary to continue postponing the reform and to place the necessary adjustments on the shoulders of future generations.<\/p>\n

A notional accounts system, as proposed here, could address such a magnitude of challenges and solve the sustainability problem of a balanced pension system, always through gradual implementation and with the appropriate financing. But at the same time, it would need to be complemented with the set of measures proposed here and, of course, with all the structural reforms that contribute to increasing the potential growth of our economy and, with it, reducing our unemployment rate to bring it closer to that of our European partners.<\/p>\n

\u00a0<\/strong><\/p>\n

Madrid, November 19, 2021<\/strong><\/p>\n\n\t\t<\/div>\n\t<\/div>\n