“We must reinforce pensions with taxes if we want them to be sustainable”

It attracts sympathy wherever it goes. That cordiality, naturalness and vehemence that Magdalena Valerio (Torremocha, Cáceres, 1959) exudes may have been one of the keys to having reached, ten years later, an agreement within the Toledo Pact, after more than four years of intense work . And he has achieved it in just ten months at the helm and with very difficult conditions: with a Parliament more fragmented than ever and with a pandemic that has turned the country upside down.

Her career also made her an unbeatable candidate for the position of president of the Toledo Pact: a lawyer and a career Social Security official, she has passed through almost all the steps of the political class, including that of Minister of Labor and Social Security. And he has not disappointed, as was demonstrated in the session for the approval of the Toledo Pact agreement, where all political groups without exception praised his good work.

“Congratulations, President.” This was a long-awaited deal, but a complicated one. And he has achieved it in a few months of presidency and at a very difficult time. How did you do it? What is the secret?

-It is true that hearing about the word agreement is falling with it is quite difficult, but we are in the Toledo Pact. If in the Toledo Pact we are not capable of agreeing on political forces of different kinds for the sake of something as important as guaranteeing the present and the future of the welfare system … We have put a lot of patience, there has been a debate relaxed, calm, debate in which it has obviously been possible to disagree, but there has been no insult. Having a good working environment makes it much easier to find meeting points, because everyone has to give in.

– Do you trust that when this agreement reaches Parliament it will receive majority support?

– At the very least, I would like you to receive the same support that you have received in the committee. Now I hope I can get a few more, but 30 votes out of 37 is a very qualified majority. If a pension reform is based on two pillars: agreement in the Toledo Pact and agreement in social dialogue, the chances of it remaining over time are much greater than that generated unilaterally by a political party without an agreement .

–There are voices critical of this document for being –they say– a minimum agreement.

–It seems to me that progress is being made on many issues and it is an achievement to have achieved majority support. We do not legislate, we only recommend, we set guidelines, but it has to be the Government that makes the proposals and presents the bills.

– What differences does this document have compared to that of February 2019, when the agreement that was believed imminent was blown up?

– There have not been many. The philosophy remains. What has sometimes been done is to lighten the text a bit, because it was quite long. More than substantive changes in many recommendations, there has been, above all, a change in form. There has been, for example, a change in recommendation 12, which talks about the retirement age. We have asked that within three months the Ministry make an in-depth analysis of early retirements with a reducing coefficient, defining which ones have been voluntary and which ones are forced due to the previous crisis situation in case they had to be rectified to avoid inequities. The proposal of some association is to remove them completely, but hey, in any case all this is analyzed in depth and it is determined which groups are affected.

– But the position of the commission then is favorable to solve those unjust cases of people doomed to the retirement with strong cuts?

Yes, yes, indeed. Then the solution will have to be put on the table by the Government.

– Do you support the decision announced by Minister Escrivá to penalize early retirements?

– I do not want to give personal opinions. Not all retirements are the same and early retirements of groups with difficult or unhealthy tasks have to be regulated. Also of people with disabilities. And then there are people who, without being part of these groups, have health problems and for that there is the disability pension or severe disability. Early retirement is sometimes sought as an option when what needs to be done is to grant a disability pension, if it is justified from a medical point of view. On the other hand, the legal retirement age is not going to be increased beyond 67 years, but we do want to go little by little by balancing the real retirement age to the legal one. That is why we also urge to encourage those who want to be able to extend the legal age of retirement.

– And if what is sought is to extend, is it not incongruous that the Toledo Pact maintains the privileges of civil servants of the passive classes to retire at 60 years of age?

– Yes, but it is that in life when you access something you have certain conditions, you have acquired rights that the recommendation asks to be respected.

– One of the measures agreed and that has already started is to transfer all expenses other than pensions to the State to end the Social Security deficit, but this only transfers this problem elsewhere.

–Workers in this country, with contributions, have contributed to making health what it is, they have contributed to the existence of minimum supplements, to non-contributory benefits, maternity and paternity benefits … We have helped many policies and it turns out that a time of crisis arrives, wages and contributions fall, we no longer have to pay what we do but we continue to pay for things that had to be paid with taxes. All this has to be clarified and then only comply with the law, which says that non-contributory benefits are financed exclusively with the general state budgets and contributory ones are basically financed with contributions, but taxes can also be injected.

– That is, more taxes will be needed to pay the pensions.

– If we want to make the pension system sustainable, we have to do many things. More jobs and higher quality jobs, reorder all Social Security expenses and income, control fraud … And then, obviously, reinforce Social Security budgets first with State transfers to end the deficit and then, in the future, it will probably have to be reinforced as other countries are doing: via taxes. This is so and that implies that a powerful tax reform must be carried out, because in our tax system we have several points less than in other comparable EU countries. Then you also have to fight relentlessly against labor fraud, against Social Security fraud and against tax fraud. With the master plan that we put in place when I was a minister, 187,000 jobs were created, which implied a collection of more than 1,500 million euros for Social Security.

– There are those who interpret that the Toledo Pact opens the door to create a tax on robots.

–That is not said, but it is said that the challenge is to find innovative mechanisms that complement the financing of Social Security beyond contributions to correct an excessive dependence on contributions in a productive and demographic context very different from that of the present XX. This would strengthen the financial structure of the system. Maybe it is not a tax on robots, but maybe it is on companies that are highly mechanized, highly robotized, that have to make a contribution plus.

–Despite the recommendation of the Toledo Pact and the bad press it generates, in 2021 the figure of the loan will be used again to pay pensions. Do you think it would have been better to eliminate it already this year?

– What ordinary citizens want is to continue collecting their pensions on time every month. What would be ideal if there were no loans next year? Yes, but we are in covid-19, the impact of the pandemic on Social Security accounts is being very damaging, and at the moment it cannot be. The Social Security liner must be reoriented, but it is of such magnitude that it cannot and should not be swerved. And the essential thing is to ensure that all pensioners collect their pension on time.

–The current document leaves the recommendation on the reserve fund more open. Why has it been eliminated that it has a minimum of 7% of the annual expenditure on contributory pensions?

– Honestly, we have not wanted to put any percentage because at the moment there are no surpluses. We could have put whatever we want, but it will not be possible in the next five years. That is why we have unanimously considered that this percentage should be eliminated. The reserve fund must be maintained because at the public level it is the same as at the private level: it is good to have some savings because they give a lot of peace of mind.

“We cannot ask ourselves what to do with widowhood pensions until there is equality”

– Some alarm has been generated around the widow’s pensions by urging to carry out a comprehensive reformulation. Are there reasons for this?

– I think it does not generate much alarm because it is left pointed but without deepening. And it is clear in the committee that it is not possible to ask what we do with widowhood pensions and if they are conditioned on income or made incompatible with another pension until in this country there is no labor equality between men and women, until It is always women who have the most precarious employment, more part-time contracts, until there is no real co-responsibility within the houses and they have the same salary for the same job, until we manage to end the gender gap in pensions. Maybe when we have all equaled ourselves in the labor market and in pensions and all women have a retirement pension, maybe at that moment we can ask what we do.

– Another of the doors that they leave open is to establish what is a decent pension and set a minimum. Shouldn’t the commission have done this work already?

– The Toledo Pact reaches a meeting point for all, but then it has to be the Government of the day that makes an analysis to see how this has to be done. It would be good to have the pensions referenced in the same way that it is recommended that the minimum wage be 60% of the average wage. On the other hand, it is said that the issue of the maximum pension and the maximum contribution must also be analyzed, because the maximum contribution is much higher than what may be the maximum benefit later. A ratio of maximum pension and maximum contribution must also be established in order not to greatly break the principle of contributivity.

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