Madrid (EFE).- The pension reform that the Government has presented to the social agents includes a solidarity quota in the contributions of the highest salaries, doubling the intergenerational equity mechanism (MEI) and being able to choose between the calculation period current to calculate the pension or extend it.
The reform, agreed with Brussels and within the coalition government, is part of the milestones committed to unblock a new disbursement of European funds and focuses on ensuring the sustainability of the system with different measures to strengthen income.
This last block is added to the package of measures agreed in July 2021 and which, among other changes, once again linked the revaluation of pensions to inflation.
These are some of the keys to the reform that the Government trusts to be able to add to the unions, since the employers have been rejecting increases in social contributions.
Computation period: maintain 25 years or extend to 29, being able to remove two
A “dual regime of the computation period” is established for the next 20 years that will allow pensioners to choose between maintaining the 25 years of contributions that are currently taken into account to calculate the initial pension or counting 29 years, being able to discard 2, which leaves that period in 27 years de facto.
According to sources from the Ministry of Inclusion, the new option to expand and discard will be deployed progressively over 12 years, starting in 2026, “with the aim of benefiting workers with irregular careers.”
The calculation period has been one of the main obstacles in the negotiation, since both the unions and Podemos were opposed to extending it.
Gaps coverage and gender gap
To try to make progress in reducing the gender gap in pensions, two measures are introduced.
To begin with, with respect to the coverage of periods without contributions, the so-called gaps, it is maintained that contribution gaps are compensated with 100% of the minimum base for the first 4 years and with 50% of the minimum base from the month 49.
To this is added, for employed women, 100% of the minimum base up to the fifth year and 80% of the minimum base from the fifth to the seventh year.
It also states that the gender gap complement of pensions -currently set at 30.40 euros per month for each child- will have an increase of 10% in 2024 and 2025 in addition to the annual revaluation that is set according to the increase in pensions .
Increase in bases and maximum pensions
On the income side, the reform contemplates several measures starting with an increase in the contributions of the maximum bases, which will take place between 2024 and 2050, adding a fixed amount of 1.2 percentage points to the annual amount of the CPI.
The maximum pensions will also be revalued year by year with the annual amount of the CPI plus an additional increase of 0.0115 cumulative percentages each year until 2050. From 2050 to 2065 there will be additional increases.
solidarity fee
Together with the progressive uncapping of the maximum contributions, a solidarity quota is imposed for the part of the salary that is currently not contributing due to exceeding the maximum contribution ceiling.
This quota will be 1% in 2025 and will increase at a rate of 0.25 points per year until it reaches 6% in 2045.
Intergenerational equity mechanism
Also to improve the system’s income, a progressive increase in the Intergenerational Equity Mechanism (MEI) is included, which came into force this year and which represents an increase of 0.6 points in contributions, of which 0.5 points they are paid by the company and 0.1 by the worker.
Thus, it is stated that it will go from those current 0.6 percentage points to 1.2 percentage points in 2029, at the rate of one tenth per year, in order to “reinforce the system during the years in which there may be greater tension due to the retirement of the ‘baby boom’ generation”.
Improvement of minimum pensions
Together with these measures to reinforce income, the reform establishes a path of increase in minimum contributory pensions to ensure that they converge with 60% of the median income.
For this, the evolution of the minimum pension with a dependent spouse is taken as a reference, which between 2024 and 2027 would reach 60% of the median income corresponding to a household of two adults.
A similar process is established for the evolution of non-contributory pensions, which would grow until they converge in 2027 with 75% of the poverty threshold calculated for a single-person household.
