Spain is under pressure from the European Union to reduce the debt of the public pension system, and Social Security Minister José Luis Escrivá announced on December 12 that he is studying incentives to attract workers to delay retirement, including the idea of paying up to 12,000 euros (about $14,000) a year or a 4% increase in individual annuity payments.
The Times and ARA reported that Spain’s public pension system is one of the most generous in Europe, accounting for about 12 percent of annual economic output. But the deficit of the social security system is also quite alarming, reaching a record 20 billion euros in 2020, accounting for 1.8% of GDP. Experts point out that if the West does not want public annuities to last, it must raise the retirement age and cut annuities. The EU executive committee has also demanded that Spain reform, otherwise it will not be able to use the huge EU recovery fund.
Escrivá, who is in charge of planning the reform, proposed one of the first draft, which is to raise the average retirement age from the current 64.6 years to 65 or 66 years, according to the occupational category, and to “induce” workers to delay retirement, while preparing to offer more severe penalties for workers who can receive high annuities and retire early, and to cut The rate of reduction from the current 4% to 17% in one fell swoop.
The newspaper pointed out that the previous ruling conservative People’s Party cabinet cancelled the annuity increase with the price index in 2013, which is equivalent to a substantial freeze, leading to strong protests from retired elders, and the current ruling Socialist Party coalition cabinet intends to restore the old system. But everything has not yet become final, still need to negotiate with employers and trade unions, and sent to the cabinet for discussion and parliamentary approval, it is said that until 2022 will not take effect.
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