Pension status pact
Demographics Change economy
Over past five years, y have menudeado preoccupied warnings of national and international organizations about pension system in Spain. The financing of system faces two serious problems that are difficult to cope with without a deep reform of income and expenditure. On one hand, precarious employment cannot pay benefits of 8.3 million pensioners, so that government has resorted to reserve Fund ( Pension Piggy bank). But piggy bank is practically empty. After last extractions re are only 8 billion of initial 66 billion; The money needed for a single extra paycheck. Then we will have to resort to paying pensions with debt.
The second problem is that even in good working conditions re is continuous and unstoppable pressure on social system to increase pension spending. The new features, those that enter system, are always higher than previous ones, which disappear from system. And ageing population — OECD has just warned that year 2050 will be 76 retirees for every 100 workers, compared to a current ratio of 30 to 100 — increases without stopping volume of expenditure, because increase in life expectancy extends period of PERCEP tion.
The situation is, without exaggeration, criticism. And not because y are not going to pay for ir pensions — that will not happen, but re is a risk of cutting benefit — but because this is time to make decisions if system's forced reform is to occur without cuts. However, despite haste of time, concern of pensioners (especially those who will join regime from 2018) and damage caused to whole of economy recourse to debt, government and Parliament are acting with a frivolid Ad exasperating. Both parliamentary committee — which should have delivered reform recommendations before summer — as Bureau of Ministry of Employment with social agents are failing to fulfil ir commitments and postponing solutions. While piggy bank (symbol of funding crisis) empties, Minister of Employment continues to ensure that nothing happens.
The basic lines of a system reform have been enunciated with reiteration. On expense side, it is necessary to extend effectively retirement age ( plan of Seudorreforma of Rajoy has failed) and to allow workers to be able to work without decrease of pension after ir retirement, to increase income. The payment of some pensions to budgets must be diverted. And on income side, it is only up to higher wage quotes (coming up with benefit) and ending inoperative employment subsidies (flat rates).
You can't and should not waste any more time. Pensions are a state problem that political mechanics of government-parliament-social agents are facing with negligence despite warning signs. Neir are y worth excuses nor reassure anyone "nothing happens" official.
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