The concern for the sustainability of the pension system
The sustainability of the pension system is a matter of great concern in Spain. With a steady increase in retirees and rising life expectancy, public spending on pensions is growing. This poses challenges in the sustainability of the system and in prolonging the delivery of benefits for more years.
Revaluation of benefits and notices of the European Union
The Government has taken measures to ensure that benefits remain in line with the Consumer Price Index (CPI), ensuring that beneficiaries do not lose purchasing power. Despite this, the European Union has issued warnings about the need for a reform of the pension system in Spain, asking for an adjustment of 12,000 million euros. This situation could lead to possible cuts in pensions, since the EU has pointed out that Spain is the country where expenditure in this area has increased the most.
Analysis by the economist Gonzalo Bernardos
Economist Gonzalo Bernardos has provided his view on existing pension models. According to Bernardos, the current pensions are considered generous in relation to the last salary, especially considering the ‘baby boom’ generation that is retiring. He highlighted that two different models have been implemented, one of which is closer to the Brussels guidelines, while the other focuses on maintaining the purchasing power of retirees.
Different pension models
Bernardos explained that the first model, influenced by European guidelines, involves an annual adjustment of pensions based on the CPI, with the consequent possible decrease in the purchasing power of retirees. In contrast, the second model, promoted by the PSOE, seeks to increase incomes to ensure the maintenance of the purchasing power of retirees, but requires conditions such as strong growth in wages and the active population.
Possible cuts and future prospects
The possibility of cuts in pensions has been raised, but Bernardos has pointed out that this would not necessarily imply a direct decrease in benefits. He highlighted the importance of factors such as the increase in the Interprofessional Minimum Wage (SMI), job creation and the arrival of immigrants as elements that could prevent these cuts. In addition, he has underlined the good performance of the labor market and the increase in wages as factors that could contribute to maintaining pensions without significant adjustments.
