Parliamentary processing begins
Updated on Tuesday, 24 August 2021 – 14:03
The reform will enter into force in 2022, after its processing this fall, and may be reviewed again in 2027
The Minister of Territorial Policy and Government Spokesperson, Isabel Rodrguez. Juan Carlos HidalgoEFE
The first Council of Ministers after the holiday break has approved the bill with the first measures to reform the pension system. With this new regulation, the Pension Revaluation Index is annulled, so that the CPI regain weight in calculating pensions. Thus, the revaluation of benefits will be known in December and will be applied in January.
Isabel rodriguez, Minister of Territorial Policy and Government spokesperson, explained in the press conference after the Council that the reform is framed in the current recovery, the Toledo Pact and the Resilience Plan: “Pensioners could not be left out of this recovery” .
“These measures come to guarantee the purchasing power of pensioners”, who remained in uncertainty after the 2013 reform, assured Rodríguez. This reform, he added, will last over time to provide security. “From now on, no pensioner will have to worry about their pensions: they will always be able to revalue and, if the CPI is negative, they will remain with the previous year,” he added.
The reform will enter into force in 2022, after its processing this fall, and may be reviewed again in 2027. In any case, it is expected to cost about 2.5% of GDP over the next 30 years.
The reform will also adjust the reduction coefficients for early retirement with various measures aimed at extending careers. In this way, the actual retirement age (around 64 years) would approach the legal age (66 years). By delaying the effective age, expenses are saved in the system, since it continues to enter contributions and does not pay pensions.
Social Security, in fact, considers that half of the cost that the CPI will have to index again in pensions will be offset precisely by this delay in retirement. Delaying retirement by one year will mean receiving an additional 4% in the pension, while bringing it forward will have a monthly penalty and affect more those who retire two years early. The adjustments in early retirement could lead to cuts in up to 21% in the pension.
In this sense, Rodríguez stressed that a check of up to 12,000 euros per year, that additional percentage or a combination of both formulas can be obtained. As a novelty, pensioners of the passive classes will have the same regularization in terms of revaluation and incentives in the delay of retirement as the rest of pensioners. In any case, all these measures should be complemented by the reforms of the second phase.
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