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ARCHIVED - Spain plans to increase the pension calculation period to 30 years
Opposition groups believe the measure will mean a reduction in the pension of new retirees in Spain
The Spanish government has proposed extending the public pension calculation period from its current 25 years to 30 years with one key exception: future pensioners will be allowed to choose the most profitable 28-year period, excluding the least favourable 24 months, from the reckoning.
The proposal was put forward by Spain’s Social Security Minister on Monday November 28 and it must now be studied by the unions and employer groups. If approved, the measure will be introduced during a transition period between 2027 and 2038.
It should be remembered that, initially, only the last 8 years of working life were used to calculate the pension. This was changed to 15 years and was again extended to 25, which is still not actually fully in force.
Minister for Labour, Yolanda Diaz, has spoken out strongly against the proposal, claiming that the extension will reduce the rights of workers to access their pension and will ultimately leave them out of pocket.
However, although the Bank of Spain has calculated that moving the period from 25 to 30 years could initially mean an 8.5% cut in benefits, the fact that the best 28 years can be chosen would essentially neutralise the impact. Given that the worst two years can be discarded, the extension – in reality just three years - would have very few financial consequences for pensioners.
The suggestion of improving the treatment of contribution gaps (long periods without contributing) has received a more favourable response, as has the Ministry’s intention to link the maximum contribution base to the CPI, as well as an additional annual increase of 1,154 points between 2025 and 2050. This increase will be accompanied by an improvement in the maximum pension.
The Spanish government was quick to emphasise that these proposals simply represent a “starting point” and that they are open to suggestions from the groups involved.
Image: Pixabay
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