The good change that Minister José Luis Escrivá needed to perform in his plans to reform pensions was when he got here to the conclusion that neither Podemos nor the unions had been going to just accept the extension of the calculation interval, even when it was with situations, and He devoted himself to in search of different formulation.
The good change that Minister José Luis Escrivá needed to perform in his plans to reform pensions was when he got here to the conclusion that neither Podemos nor the unions had been going to just accept the extension of the calculation interval, even when it was with situations, and He devoted himself to in search of different formulation. He actually discovered them, via the coexistence for at least 20 years of the 2 methods: the present one in all 25 years and the brand new one in all 29 years suppressing the final two years. However this has a worth. The reform was now not impartial and new earnings needed to be discovered. Escrivá balances it with three new sources of contributions, which tax social contributions and particularly these with greater incomes, and with a safety mechanism that shall be activated mechanically if spending soars.
The three new types of earnings are the uncapping of most pensions, the reinforcement of the Intergenerational Fairness Mechanism (MEI) and the solidarity quota for wage brackets that exceed the utmost contribution ceiling. When all these measures are totally deployed, the Authorities calculates that Social Safety will accumulate 15,000 million euros annually. The target is to cowl a pension expense that can enhance, each as a result of arrival of the infant increase era at retirement, and as a result of new advantages integrated, equivalent to the rise in minimal pensions, the higher complement of the gender hole and The perfect protection of the gaps in skilled careers.
If pension spending now accounts for 12% of GDP, this share is anticipated to extend till it reaches 15%. That is the place the brand new system, along with the brand new sources of earnings, provides a safety mechanism that can enhance earnings mechanically if sure limits are crossed. That's, it can enhance the MEI costs.
Within the doc that was delivered to the social brokers on Friday, and to which La Vanguardia has had entry, it's indicated that the Impartial Authority for Fiscal Accountability (Airef), as of March 2025, will consider each three years the typical annual affect of the measures adopted as a share of GDP. To take action, it can take as a reference the most recent Growing old Report revealed by the European Fee. "If the typical annual affect of the earnings measures is the same as 1.7% of GDP, Airef will confirm that the typical public spending on pensions within the interval 2022-2050 of the final getting old report doesn't exceed 15% of GDP" , says the proposal. Airef will do the identical train if the affect is greater or decrease than 1.7%.
From the Airef report, alarms might be activated if deviations have been detected. The primary alarm leads the Authorities to behave to right the issue "via a rise in contributions or one other different method to extend earnings or a discount in pension spending as a share of GDP or a mixture of each measures".
Nonetheless, if the Authorities doesn't act in time, the second alarm, an automated mechanism, would come into operation. "The contribution of the Intergenerational Fairness Mechanism will enhance to compensate two tenths of the surplus estimated by Airef as of January 1 of the publication of the Airef Report and one other two tenths in every of the next years till they're adopted. new measures of the identical affect or the surplus of internet spending is corrected”, says the proposal.
As soon as Escrivá's plans had been identified, the employer's criticism was resounding, accusing the Authorities of "assortment voracity" for the rise in social contributions, which principally fall on firms. Within the case of the MEI, of the 1.2% contribution that it expects to achieve, 1 level corresponds to firms and two tenths to staff. For what corresponds to the solidarity quota, of the 6% that it'll lastly have, 5% is borne by the corporate and 1% by the employee.
Nonetheless, Escrivá rejects that there shall be any lack of competitiveness. His argument is that when the measures are totally deployed, in 2050, they are going to imply lower than 40 cents per hour labored "and costs will proceed to be nicely beneath the euro zone common."
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