This exercise will be key for pensions. After agreeing on a ‘light’ reform whose star measure will link retirements to the CPI, the Minister Escrivá must complete the cut of 30,000 million committed with Brussels to ensure the sustainability of the system at the gates of the disembarkation of the ‘boomers’, a generation born between the late 1950s and mid-1970s that will have to choose between paying less or “working a little more”, according to the minister himself, who agreed with the unions for a 0.6% rise in contributions from 2023 to cope with this cost.
This year, therefore, the changes introduced in the 2013 rule will coexist and those committed to Europe to receive the funds. Thus, the
The arrival of 2022 will bring a new tightening in the requirements to access retirement and awards for voluntary delay in retirement in a context of strong inflationary pressures, with prices already touching 7%. Payrolls will grow 2.5% and retirees will be compensated with a pay equivalent to 1.6% of salary for price deviation.
Those who want to retire throughout this year with 100% of the pension that may correspond to them must have already completed 66 years and two months in compliance with the norm approved by the PP, which progressively began to apply the delay of the retirement up to 67 years approved by the Zapatero Government.
What are the advantages for the public system of raising the retirement age? On the one hand, it allows for a more active population to finance pensions. On the other, it delays the collection of retirement. In other words, if a worker remains active until age 67, there are two more years that they contribute to the common fund, but not consuming a pension.
The withdrawal delay, which is generally approved, has its exceptions. Workers who accumulate a long working life may retire with their full pension at age 65 as long as they have contributed more than 37 years and six months. For each fiscal year, that period is increased by three months until 2027, When whoever wishes to retire at 65 must have a contribution of at least 38 years and six months.
The generation that is now retiring began to work very young and, therefore, accumulates many years of contributions to the system. More problems to jump this bar will have the current young people, who have later started to quote at the Social Security and with lower salaries. The same occurs with women with contribution gaps, who, as a general rule, are due to dedication to their children.
In 2022, the years taken into account to calculate the pension will also change and will be set at 25 years. Will this count be the final one? Moncloa launched the probe balloon that these years would go to 35 with the pension reform, a measure that would cut the pension by around 10% and that for this reason provoked a bitter debate in the coalition and was left in the drawer. It remains to be seen if it is included in the changes of the second round of the reform.
Retirement due to dismissal: 64 years and two months
With the new year also come changes in early retirement. The norm delays the age to access voluntary early retirement to 64 years and two months, in parallel to the legal age to be carried out two years before also until 2027, when it will be established at the minimum of 65 years. In addition, to access this modality, at least 35 years of contribution are necessary, and for each quarter of advance with respect to the official retirement age, the pension will suffer a progressive penalty that will go from 2% of the regulatory base per quarter, if They have been listed for less than 38.5 years, up to 1.625% if they exceed 44.5 years of listing.
In the case of forced retirement (due to dismissal), it may be carried out up to four years before the legal retirement age, which places it at 62 years and two months in 2022. At least 33 years of contribution will be required and the penalty will range from 1.875% per quarter in advance for less than 38.5 years listed, up to 1.5% for more than 44.5 years listed.
The norm approved by Escrivá also includes a toughening of these penalties, although their application is delayed until 2023, when it begins the retirement of the ‘boomers’ and its application for a period of ten years. The design of the reduction coefficients is toughened for those who retire 24 or 23 months before the legal limit and will reach 21% (now it is 16%) and from there the punishment falls in some cases. For example, those who leave the labor market 22 months before their legal retirement age will see their pension decrease by 14.67% and not by 16%. The change in penalties will begin to apply every month instead of every quarter.
Clauses in the agreements: prohibited for minors under 68 years of age
The norm that Brussels is examining prohibits forced retirement clauses for employees under 68 years of age and will apply to agreements signed as of the entry into force of the reform, on December 29. In those previously signed, these clauses may be applied up to three years after the end of the initial term agreed for the agreement. In addition, if these clauses are established, companies will have to hire at least one full-time and fixed worker for each forced retiree. There is an exception: companies will not be able to retire people under 68 years of age except in sectors in which women represent less than 15% of employees.
More work: 4% more pension as an incentive
This year, new monetary incentives begin to apply for those who continue working beyond the legal retirement age. They will receive a one-time premium of up to almost 11,000 euros (in the case of 37,567 euros of pension) for each year of delay. If the worker has contributed for at least 44.5 years or more, this incentive would reach the 12,060 euros for each year of deferral. The worker will be given the option of choosing this formula or also opting for a 4% increase in the regulatory base of his pension for each of these years that his retirement is delayed. They may mix the two possibilities, one part in a single payment and the other as an increase in the life pension.
Price deviation: an average pay of almost 300 euros
An exercise in news and increases. Since this month, pensions have risen by 2.5%, the inflation registered between December 2020 and November 2021, as stated in the new pension law. The deviation in prices will also imply an additional outlay of 1.6% in a pay to compensate retirees with an extra cost in pensions, but only in part since prices have already grown to 6.7%.
With the 2.5% increase, the average retirement pension, which is located at 1,195 euros, will increase by about 30 euros per month (420 per year) and in this case the ‘pay’ that the retiree will receive in a single payment at the beginning of the year to compensate for the deviation in prices will be 268 euros. The maximum pension of the system will be revalued to 2,775.17 euros per month, while the minimum pensions will increase by 3%, the same as the Minimum Vital Income.
After these revaluations, Spain returns to the costly formula for the economy of linking rents and prices, a ‘modus operandi’ that was applied in the 1990s and that the 2013 reform replaced by the revaluation index, which until 2018 linked the increases to the health of the Social Security with increases of 0.25%.