The Government and unions have sealed the agreement for the second part of a pension reform that will mean an increase in the minimum pension of 22% in four years, up to 16,500 euros in 2027. These are the calculations provided by the Minister of Inclusion and Social Security, José Luis Escrivá, in his speech before the Toledo Pact commission.
Everything has followed the planned script. In the morning, the management bodies of CC.OO. and UGT unanimously ratified the agreement, after managing to add some additions, basically guaranteeing a floor for minimum pensions. Later, Escrivá and the two general secretaries, Unai Sordo and Pepe Álvarez, presented the agreement in an appearance before the media, and finally, the minister gave details in the Congress of Deputies.
The most relevant are the 22% increase in minimum pensions, both contributory and non-contributory. The objective set is that in 2027 the minimum contributory pension with a dependent spouse “may not be less than the poverty threshold calculated for a household made up of two adults”, according to the latest draft, which may still be modified, but would be in in any case very minor. In this way, this pension would go from the current 13,500 euros per year (964 euros per month in 14 payments) to 16,500 euros (1,178 euros per month) in 2027.
The increase is also 22% for non-contributory pensions, and here the result is to go from the current 6,800 euros per year (488 euros per month) to around 8,300 euros in 2027 (593 euros per month).
Another of the elements that Escrivá has detailed has been the increase in resources that he expects to obtain with the three new income formulas, which would mean 1 point of GDP in the 2040s, which is when the system will be most stressed for demographic reasons. It is when the bulk of the baby boom generation enters retirement, who are more and with higher incomes than current pensioners. The income would basically be obtained by increasing the maximum bases (0.4 points), and the Intergenerational Equity Mechanism (MEI); (0.5 points) followed by the solidarity quota (0.10 points)
