The new Spanish pension reform means cutbacks

Apr 04, 2023

We are faced with a new offensive against the pension systems in Europe. We can see it in France, where the demonstrations and strikes have not been able to prevent the pension reform and the postponement of retirement age from 62 to 64 years carried out by Macron in an anti-democratic way.

In the case of the Spanish State, the Government has reached an agreement with Brussels (as a condition to unblock the next batch of European funds) regarding a new pension reform. Unlike France, back in 2011, a reform was passed (with the socialist party and the majority unions) which, amongst other steps, postponed retirement age to 67 year and cut back the amount of new pensions by 5% (going from 15 to 25 years for the number of years that had to be taken into account to calculate the aforementioned amount). Now, the Spanish Government has passed a new reform, about which it is subjecting the population to a propaganda campaign, giving a partial version of the reform, arguing that there are no cuts and intentionally forgetting that it consolidates deep setbacks in terms of pensions. The truth is that:

1. More years of work will be taken into account to calculate the amount of the pension.

- From 2040 the last 29 years of contribution are going to be taken into account to calculate the pension (instead of the current 25 years), which means a cut in pensions of people that are now under the age of 50.

2. The next cuts are assumed, establishing the spending limit.

- A limit is placed on expenditure on pensions (15% of the GDP) and a mechanism to make reductions is set forth.

- From March, 2025 and every 3 years following this, a crucial role is given to the AIREF (an “independent” institute with a marked neoliberal orientation) to evaluate the pension situation and being able to propose adjustment measures.

3. Greater incidence is placed on the relation between pensions and social contributions, ignoring that pensions should be basically funded by taxes.

4. Minimum pensions are increasing very little, and in many cases they continue to be a pittance. For example, the minimum retirement pension for a person aged 65 years or more, without a dependent spouse, or the minimum widow/widower’s pension for people over the age of 65 years, in both cases will go from 783 to 828.5 euros. An increase of 45 euros per month, which will not even start to be applied this year, but rather will be applied progressively over the next four years. The reform also allows non-contributory pensions (525 euros) to be frozen or even decreased.

5. The gender gap has been maintained. Women receive a substantially lower pension than men. However, the steps included under the title of “gender gap” mean hardly any change regarding the current situation.

6. The cuts set forth in the 2011 reform are maintained. A return to the age of 65 years as retirement age is needed; going back to taking into account 15 years of contributions to calculate the pension or eliminating the cuts in early retirement or in hand-over contracts. In addition to not modifying these subjects, a new step has been taken by increasing the retirement pension calculation period from 25 to 29 years.

7. On the 4th of April we are taking to the streets. ELA supported the demonstration organised by the Basque Country’s Pensioners Movement on the 18th of March. ELA is also going to carry out different actions, amongst which are the mobilizations that we are going to perform on the 4th of April in Bilbao and Pamplona to reject this reform and demand a public pension system that guarantees sufficient income to be able to live with dignity.