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The Government is studying awarding a check to those who retire after reaching the legal retirement age

2020-10-27T22:05:58.611Z


Escrivá seeks to improve incentives for those who extend their working life Several elderly people stroll down a street in Terrassa (Barcelona) .cristóbal castro / One of the cornerstones of the pension reform that the Government is preparing is to get workers to retire later without raising the legal retirement age. To this end, it plans to increase the incentives offered by the pension system to those who voluntarily decide to work beyond that horizon. How to do it? Am


Several elderly people stroll down a street in Terrassa (Barcelona) .cristóbal castro /

One of the cornerstones of the pension reform that the Government is preparing is to get workers to retire later without raising the legal retirement age.

To this end, it plans to increase the incentives offered by the pension system to those who voluntarily decide to work beyond that horizon.

How to do it?

Among the options that the department headed by José Luis Escrivá is considering is the possibility of giving a lump sum to those who delay their retirement and work after having reached those 65 or 67 years, sources from the Executive point to EL PAÍS.

The Toledo Pact, which today votes on the official recommendations for the pension reform, says in its draft closed last Friday that "the effective exit age from the labor market must be as close as possible to the ordinary legally established retirement age. ”.

The Government has explained the same to Brussels in its reform plan, advanced on Monday by this newspaper.

And that same objective set out the Minister of Social Security, José Luis Escrivá, in his last appearance before the parliamentary commission that deals with pensions.

He even quantified that pension spending is adjusted by an amount equivalent to 1.2% of GDP for each year that the effective retirement age is delayed.

Now that threshold is 62.1 years in 2018, taking the OECD data on the moment of exit from the labor market.

To achieve this objective, the plan designed by Social Security has a double track: discouraging early retirement and making retirement beyond the legal retirement age more attractive.

In 2020 this threshold is 65 years and 10 months for those who have contributed less than 37 years and 65 years for the rest (it will reach 67 years in 2027 if 38.5 years or more are not listed).

One of the points that this department studies to convince workers to voluntarily extend their working lives is to offer them a lump sum if they delay their retirement.

Official sources admit that this option is on the table, although they add that it is "very green."

"In the ministry the different options are still being evaluated, which they will conveniently evaluate in the face of a possible reform," they continue.

Other sources point out that the Executive commissioned an external report.

The

current

awards

to prolong working life are not successful, as Escrivá pointed out, who announced in Congress "a new system of incentives to favor the delay of the retirement age, which respects the principles [...] of equity and contributivity ”.

Less than 5% of those who retire do so after reaching their legal age and receive compensation, an increase in the pension of two percentage points (which can reach four) for each year that is delayed.

This incentive is below other European countries: in Germany it is 6% and in France, 5%.

In Spain there would be room to raise it, either with more benefit or by capitalizing the increase in a check, something that could give it more visibility.

According to CC OO, the equilibrium point at which neither Social Security nor the worker would lose is somewhat above 4.6 percentage points of cut or incentive per year.

In addition to the improvement of incentives and their publicity dissemination, Escrivá intends to "reinforce formulas for compatibility [of the pension] with work that allow the prolongation of professional careers," as he stated in Congress in September.

Less attractive

Social Security also seeks to make voluntary early retirement less attractive;

not so the forced one, destined to those who lose their job and older in collective dismissals.

In the voluntary, there is the option of retiring two years earlier than what is established by law with a reduction in the benefit from 2% to 1.625% per quarter in advance.

But, as the minister points out, this norm is regressive.

Why?

High salaries tend to contribute above the maximum bases, which translates into a regulatory base that exceeds the maximum pension.

Hence, when applying the reduction on the basis and not on the benefit, the reduction is smaller and loses potential at high levels.

Measures aimed at prolonging working life are part of the pension reform to be negotiated with the social agents.

There are other points that will see the light today, in the budget project: one is the stimulus to saving through collective pension plans, with the increase of its tax deduction;

another was the creation of a public pension fund to encourage savings among SME workers and the self-employed, as

El Mundo

announced on Monday

.

And finally, the transfer to Social Security of 14,000 million from taxes to pay improper expenses (childbirth benefits, discounts on quotas or supplements in pensions for women with children).

Source: elparis

All business articles on 2020-10-27

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