The Minister of Inclusion, Social Security and Migrations, José Luis Escrivá, opens the door for the maximum retirement pension to reach the environment of the 3,300 euros per month starting in 2050. A figure that will be reached once the process of clearing the maximum contribution base is completed, which according to a preambular approach of the minister himself could reach 60,000 euros within 25 years. If this is the path finally implemented, the increase in the maximum base and the maximum retirement pension would be of 22.8% more. However, for high incomes, the process of increasing the contribution to Social Security will be more than twice as burdensome as the average.
This was confirmed by Escrivá himself during the press conference where he advanced the affiliation data advanced for the month of November. In the questions with journalists and on the negotiation of the path of clogging that the minister placed around a 0.9% annually for the next 25 years As a possibility for the negotiations, Escrivá confirmed that with the increase in the maximum bases, and in order to preserve the contributivity of the System, the increase in the maximum benefits that the beneficiary could access “will be equivalent.”
This commitment also appears in the document that includes the components of the pension reform sent to Brussels, for the second leg of the reform, where it is envisaged to “strictly maintain” the contributivity with respect to the maximum pension during the detopement process in the coming decades. “It is an element that we have to have next year in the General Law of Social Security and with this we harmonize with the usual practices of our environment,” said the minister about the negotiation of this point.
However, high incomes will not only assume the path of rise in prices of the maximum bases, which is outlined in the vicinity of 0.9%, but will also assume, on the other hand, the generalized increase expected of 0.6% as part the deployment of the intergenerational equity mechanism. That is, the sum of both increases poses a minimum increase for the highest incomes of the 1.5% from 2023, at which point the second part of the reform to be negotiated by the Executive and social agents would begin to unfold.
Compared to the average bases, which will generally assume this 0.6% increase, the path is twice as burdensome for incomes from 48,900 euros, that is, 4,070 euros per month. However, it is these workers with more expensive payrolls who would also ultimately benefit from that 22.8% increase in their pension, in exchange for a gradual increase in their contribution to Social Security.
At this point, it should be clarified that this path could not duplicate the general rise faced by the majority of workers. He too advance of average wages agreed by agreement implies an increase in the contribution bases. Without going any further, this increase is agreed to around 1.5% for this year, which means for this number of workers an increase in the contribution base to the same extent. Also the path of increase of the minimum bases through the increase of the SMI will imply a rise in the average base, and also, it usually applies as a kind of catalyst to push up the prices of the rest of the bases.
However, it is true that despite the increase in the maximum base and the maximum pension being at the same level of 0.9%, that higher price bracket will grow more in other ways, by adding the equity mechanism (+ 0.6%) and possible updates with the CPI. At this point, although it is true that at the point of the stoppage the Executive is careful to preserve the contribution of the System with increases equivalent to 0.9%, the rest of the additions that will mean an increase in the maximum base will cause the path to be unbalanced. of increase of both concepts, growing more the maximum contribution than the maximum pension.
Escrivá’s plan B: cut pension spending or more taxes from 2032
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