The new system raises income thinking of the ‘baby boomers’, provides two ways to calculate the pension and improves minimum pensions
The Plenary Session of Congress has validated this Thursday the decree law that includes the reform of the pension system, which has finally had a broad support of 179 votes in favor, the rejection of PP and Ciudadanos, and the abstention of Vox.
Specifically, the PSOE, Unidas Podemos, Esquerra Republicana (ERC), PNV, PDeCAT, Coalición Canaria, Compromís, PRC, Teruel Existe and Más País have voted in favor. On their side, Vox and the independentists of Junts and EH Bildu have abstained, while the PP, Ciudadanos, Foro Asturias, the CUP and the BNG have voted against.
Once the decree has been validated, it has also been approved to process the reform as a bill and thus allow parliamentary groups to negotiate new modifications to the text.
The pension reform reached Congress with the approval of the European Commission and also of the unions. The new system focuses on raising system revenues to cope with the financial strains of baby boomer retirement in the 1930s and 1940s.
In an initial intervention in the Lower House, the Minister for Inclusion, Social Security and Migrations, José Luis Escrivá, has defended what is the second leg of the pension reform, which in his opinion “allows us to address the demographic challenge” through of a “set of balanced measures” that will guarantee the “sufficiency” of the system.
This new system, which would enter into force on April 1, except for certain provisions thereof, contemplates increases in maximum bases and contributions, improvements in minimum pensions and the establishment of a dual model to calculate the pension, which will give the option to choose between the last 25 years of contributions or 29 years, discarding in this case the two worst.
Until 2040 it will be possible to choose between this option and the last 25 years, while between 2041 and 2043 the 25-year option will increase at a rate of six months per year, from 25.5 years in 2040 to 26.5 years in 2043, being able to be chosen between this period or 29 years (minus the two worst).
As of 2044, you will no longer be able to choose and the pension will be calculated with 27 effective years of contribution (29 years minus the two worst). Ex officio, while the two alternatives exist, Social Security will always apply the most advantageous for the worker.
In addition, with the new reform, the mutual collaborators of the Social Security will no longer have the possibility of contacting the National Institute of Social Security (INSS) in the event that the public health service rejects their registration proposal.
BILDU ABSTAINS BECAUSE HE SEE “PENDING DUTIES”
The Government was already bringing the reform with the votes tied to move it forward, after having reached several agreements with Esquerra Republicana (ERC), PDeCAT and EH Bildu. However, this last formation, which had agreed with the Government to equip widow’s pensions with the minimum contributory, has finally decided to abstain from the vote.
As explained by the spokesperson for Bildu, Mertxe Aizpurúa, this decision happens because, although the reform includes positive measures such as the increase in minimum pensions and the non-extension of the calculation of the years to calculate the pension, it also leaves “some pending duties “.
Specifically, Aizpurúa has pointed out that his group wants the minimum pensions to be equal to the Minimum Interprofessional Wage (SMI), so that there is no retirement below 1,080 euros.
On Vox’s part, Pablo Sáez has branded the reform as “wrong” and has warned that it “does not solve the sustainability of the system.” Even so, his group has ended up abstaining without offering details about it.
In fact, Sáez has also criticized Minister Escrivá for saying that the cost increases for companies with the reform will be small, since, according to Vox, they are supporting increases in the prices of energy and raw materials and rents. . He has also reproached the Government for “increasing employment costs” with an unemployment rate of 13%.
THE GOVERNMENT AND ITS PARTNERS CELEBRATE THE REFORM
On the support side, PSOE and Unidas Podemos have spoken first. On the part of the Socialists, the spokesperson for the group in the Toledo Pact, María Mercè Perea, has praised the decree, which she has described as an “amendment to the entirety” of the pension reform of the Government of Mariano Rajoy in 2013, to the which he has described as “neoliberal”.
In addition, Mercè has reproached the PP for its criticism of the new pension system without even knowing the text, and has also snapped at the ‘popular’ that they do not provide a concrete alternative.
From United We Can, she has been in charge of defending the Aina Vidal reform, which has also focused on the change from a reform of the PP in pensions that she has considered “garbage” to a new system that focuses on increasing income and not in reducing spending.
Joan Baldoví, from Compromís, has also charged against the PP, who has accused the ‘popular’ of “polishing” 90% of the pension piggy banks in previous legislatures. Íñigo Bariandaran, from the PNV, welcomed the reform, which he described as “realistic”, “necessary” and “urgent”, since it conditions the delivery of European funds.
THE PP IS FRONTLY OPPOSED TO THE REFORM
On the part of the PP, the coordinator of the economic area of the PP in Congress, Jaime de Olano, has made clear his group’s rejection of this new system, both in substance and in form.
Regarding the form, Olano has commented that the decree will be approved “outside” the social dialogue and the Pact of Toledo. “We have found out from the leaks to the press,” said the economic coordinator, who added that the Government’s promise to process the decree as a project will have little effect because the reform is conditional on the delivery of European funds, so predictably the European Commission will hardly allow touching the approved text.
Regarding the data, Olano said that with this reform the self-employed will have to contribute 200 euros more on average to receive the same pension or less. In addition, the PP deputy has pointed out that with this new system the State will keep 63% of the gross salary of qualified workers.
On the ‘no’ side, some small groups such as the BNG, Foro Asturias and the CUP have also positioned themselves. Citizens have also voted against. In her speech, Inés Arrimada, from Ciudadanos, stressed that Spain has a “structural” problem in terms of pensions, and has branded the reform as electoralist, which in her opinion benefits the passive class of society against the active. “They want a country in the BOE,” Arrimadas snapped in this regard.