Spain presses ahead with planned pension reforms

Spain is pushing ahead with planned pension reforms, which includes paying workers to postpone their retirement, according to reports.

However, French press agency, AFP, wrote that analysts have warned the reforms do not go far enough to help reduce the deficits in the pension system.

The country revealed earlier this month that it plans to get more people to work longer by giving cheques worth up to €12,000 per year to retirement-age workers who postpone their retirement. Retiring early on the other hand would lead to a reduction in monthly payments.

According to AFP, Spain’s Budget Minister, Maria Jesus Montero, told a news conference: "Pensioners will no longer have to worry about the evolution of their pension.”

The reform, which has been approved by the Spanish cabinet, will restore the indexation of pensions to inflation. A conservative government eliminated indexation in 2013, although in 2018 it hiked pensions in line with inflation following protests by pensioners against their loss of purchasing power.

The 2013 reform also gradually increased the legal retirement age to reach 67 in 2027 from around 65 years currently.

IE Business School head of the economics department, Rafael Pampillon, believes raising pensions in line with inflation is “outrageous”.

"The system is not sustainable. Pensions should be frozen," he told AFP.

    Share Story:

Recent Stories


Podcast: The benefits of private equity in pension fund portfolios
The outbreak of the Covid-19 pandemic, in which stock markets have seen increased volatility, combined with global low interest rates has led to alternative asset classes rising in popularity. Private equity is one of the top runners in this category, and for good reason.

In this podcast, Munich Private Equity Partners Managing Director, Christopher Bär, chats to European Pensions Editor, Natalie Tuck, about the benefits private equity investments can bring to pension fund portfolios and the best approach to take.

Podcast - The power of three: Using Common Contractual Funds to improve tax outcomes for investors
Large asset owners are still investing in equities in a way where they are taxed on their income. The implication is that they get a poorer return. They need to, and can, improve this, but how?

In this podcast, AMX Head of Client and Manager Development, Aaron Overy, and AMX Product Tax Specialist, Kevin Duggan, discuss with European Pensions Editor, Natalie Tuck, about three options to help ensure good withholding tax outcomes for institutional investors.
Mitigating risk
BNP Paribas Asset Management’s head of pension solutions, Julien Halfon, discusses equity hedging with Laura Blows

Europe’s pensions challenges
Francesca Fabrizi meets Matti Leppälä, Secretary General and CEO of PensionsEurope, to discuss the key aims and objectives of the association today.