The proposals of Escrivá for pensions

When the president of the Government, Pedro Sánchez, has decided to appoint José Luis Escrivá minister of Social Security, Inclusion and Migration, has made the

The proposals of Escrivá for pensions

When the president of the Government, Pedro Sánchez, has decided to appoint José Luis Escrivá minister of Social Security, Inclusion and Migration, has made them conscious of what are their proposals to resolve the precarious financial situation of Social Security. The Independent Authority for Fiscal Responsibility (Airef), that this economist albacete has presided since 2013, has developed not too long ago, a report that launches a number of proposals to correct the situation.

In the short term, the recipes Escrivá "watchdog" of the Government action passed to provide more money to Social Security; to long for reforms that end up translating into settings and cuts for future retirees. That logic did not peel off much of what they have traditionally been the pension reforms, which, except for the one of 2013, have never applied cuts to those who are already pensioners. Now we need to know if the new minister comes to apply to the letter the treatment.

for several years the public pension system has just all of the exercises with a deficit that exceeds 18.000 million euros. This, for Escriva is doubly negative. First is by the red numbers to yes. But also for the public debate that it generates, and by the fear that it spread distrust about the future of pensions. “Close the Social Security shortfall —which brings the cause on the economic crisis and problems of design idiosyncratic and not aging— would reduce the uncertainty regarding the sustainability of the system”, reads the report of the Airef.

And for that closure, the proposal is that Social Security receives more resources by a double route:

1) That the State's contribution taxes for the money that is now spent on pay measures to promote employment, such as flat rate tariffs, the price of the self-employed during their first steps as account workers own or the operating costs (personnel, current expenditure, material...).

2) That is allocated to the pension part of the proceeds of contributions for unemployment. The unemployment insurance is divided into a part tax (benefits) and other assistance (grants and active income of insertion). Both are paid for now with what they bring workers and employers through dues. The proposal of the Airef is that this part of care is paid with contributions from the State and from contributions sent to the pension.

A more long-term, reach the settings. The institution that still presiding over Escrivá agree that the rate of annual revaluation, which determined an increase of 0.25% has become unviable socially and politically. The now minister has already criticised the formula years ago, before this report, in the halls of Congress by the great “circularity which it has.” But this does not imply that you would like to fully the revaluation just linked to the CPI, also speaks of the GDP or “income state or quotes that can combine the maintenance of the purchasing power with the long-term sustainability”. And for that time period launches other ideas.

1) to Toughen the requirements for access to early retirement and thus delay the actual age of retirement. The Airef is not speaking of touching the legal age, 67 years from 2027 (65 and 10 months in 2020). But it does increase the actual, that would 62,4 years, to come to 64,5 years in 2027 and to 65.5 years in 2048.

2) Increase to more than 25 years, the number of years with which to calculate the pension. Spain is lifting that requirement for years. In the reform of 2011 it was agreed with the unions and the employers, upload it from 15 years to 25. This increase is being done gradually every year, in 2020 will take the last 22 years listed and in 2022 it will be the 25th, which speaks to the Airef. Your proposal is to go raising it. This measure typically results in lower pensions for most workers, but not for all. Those who lose their jobs in the last years of his working life benefit.

3) The last proposal is a reform of disability pensions to “make better use of the working capacity of individuals.”

Updated Date: 12 January 2020, 03:01

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