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Saturday, January 28, 2023

At that age I can retire to receive 100% of the pension

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Click on the graphic to enlarge it

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The retirement age continues to be gradually increased as the pension reform agreed between the government of José Luis Rodríguez Zapatero and social representatives will increase the legal retirement age from 65 to 67. This change gradually started from 2013 and is expected to end in 2027. Currently, in 2022, the statutory retirement age is 66 years and two months. Next year there will be two more months and the next two more, and so on until the goal of 67 years is reached.

Also, since 2013, the pension calculation period has been extended by one year each year until it reaches 25 years in 2022 (it was 15 years before the reform). This means that the employee’s last 25 years of contributions are taken into account when calculating the pension..

The statutory retirement age and the calculation period were not touched on in the first package of pension reforms agreed between the Board of Management and social agencies, which was passed last summer. However, in the second package of pension reforms, which the government is negotiating with employers and unions (a negotiation that is becoming very complicated), there seem to have been changes in this regard since then Brussels has asked Spain to change the number of years needed to calculate the pension.

A major change made by this government was the repeal of the pension sustainability factor imposed by the executive of Mariano Rajoy, which linked the size of the pension to life expectancy trends.

This tool was replaced by an intergenerational equity mechanism agreed between the government and unions in November 2021 (employers opposed the measure), which will mean: a Price increase of 0.6 points between 2023 and 2032. Businesses generally pay this increase (they pay 0.5% more) while workers pay the remaining 0.1%.

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Source elpais.com

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