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Pension payroll increases three times the number of retirees

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The Govt In the few weeks left before the end of the year, the last phase of pension reform, the most difficult and controversial, and includes increases. Calculation periodFrom the current 25 years, a measure which can be effective in reducing costs but which the Ministry of Inclusion, Social security And the migration he directed Jose Luis Escriva Some hints are given. Almost in parallel, pensioners will enjoy at least an 8.5% increase in their wages from next January, various organizations have questioned, and this will mortgage the system for the future, and besides stability factor And with only small changes in the counting period, it will be difficult to control costs.

An increase of up to 65% in expenditure on pensions in respect of Gross Domestic Product (GDP) As highlighted in a recent report by the Bank of Spain, the increase in benefits according to the CPI will occur in 2050 and it is that this increase will be compounded in the following years, which will create a very significant additional burden. Entry of pensioners of the ‘baby boom’ generation, higher salaries and higher benefits generated by longer contributing careers. There is already a preview of the future scenario, even with minimal inflation, the last decade has seen a significant increase in pensioners’ payments for various supplements and ‘small’ revaluations of pensions.

Thus, the number of retirees from all plans has gone from 5.34 million in September 2012 to 6.26 million in 2022, a 17% increase. Meanwhile, their pension pay rose from just over 5,000 million to 7,871 million in September of this year, the latest data available; 55% more. For its part, the number of General Scheme retirees has increased by 31%, compared to 65% who make 14 payments. Including all pensions-disability, widowhood, retirement-, the monthly bill has reached 10,867 million as compared to 7,444 a decade ago, an increase of 46% which is only 11% of beneficiaries.

How much will revaluation of pension increase cost?

The Bank of Spain Each additional point of the CPI represents an additional expenditure of 1,800 million euros, which means that next year a. 15,300 million additional expenditure, which will be consolidated in the following years. Despite everything, a third of Spaniards welcome the revaluation of pensions according to the index Consumer Prices (CPI) To ensure purchasing power, according to a survey by KPMG of nearly 500 companies across all sectors. Meanwhile, another third advocates limiting the increase to the minimum and non-contributory pensions, and the rest believe that caps should be imposed on the increase, despite the fact that the planned arrangement would create a huge financial burden with a countervailing factor. .

Challenges of Public Pension System

The Spanish public pension system In the coming years, we will face headwinds from the entry of the ‘baby boom’ generation into retirement, a birth rate that does not allow for change, and an increase in life expectancy, which Spain In the country with the longest life expectancy in the world, it will significantly increase the period of pension accumulation. The second front is the wages of workers and the contribution required for maintenance of pensioners. In the second quarter of the year, the active workforce was up to 23.3 million people, of which 20.5 were employed and 2.9 million were unemployed. unemployment rate At 12.48%, the system is still too high to maintain.

Source: lainformacion.com

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