Retirement and pensions: Experts ask to retire at 75 and contribute 45 to collect 100% of the pension

The think tank Friedrich Naumann Foundation, Civismo Foundation and Juan de Mariana Institute have prepared a report in which they demand a series of measures to guarantee the future sustainability of the pension system, among them the establishment of a flexible retirement age, from 60 to 75 years, where the decision of the retirement age falls on the worker.

The report, prepared by researchers Francisco Coll, Domingo Soriano and José Francisco López, It contemplates another nine measures to make the pension system sustainable, so that he calls for an “urgent and far-reaching” reform.

In any case, the study warns that no reform will be successful if it is not part of a “more ambitious” transformation process that encompasses fiscal, labor, liberalization and market unity, and the educational system.

“You cannot solve the problem from just one element of the equation, since it would not be fair for those affected or efficient from the point of view of incentives and collection, “the authors point out.

In addition to the establishment of a flexible retirement age, these three ‘think tanks’ advocate opening the debate on the formula for the revaluation of pensions, proposing alternatives beyond the CPI; unify regimes so that all workers and pensioners are subject to the same rules, and extend the pension calculation period to all working life, with a correction factor that allows the new pensioner to exclude the five or ten worst years of his career labor.

At the same time, they ask to establish a minimum of 45 years of contributions to collect 100% of the pension’s regulatory base; recover the Sustainability Factor of the 2013 reform (currently suspended until 2023), and send an annual information letter to all workers over 50 with information on their future pension.

They also propose two reforms aimed at encouraging savings, first of all through business plans, making adjustments to current prices to transfer up to 3-4 points to a new individual savings exchange. Employees and companies would contribute another 4 extra points.

Secondly, they are committed to encouraging savings through investment companies with variable capital (sicav), opening a long-term savings account for everyone of legal age.

The report also asks to reclassify expenses and income for a better understanding of the real figures related to pensions, reformulating the definition of gross salary to include the employer’s contributions, and maintaining the contributivity of the system by not uncovering contributions or increasing the maximum bases above the increase in pensions.

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