The proposal to create a finalist contribution on the workers' payroll to finance the pensions of future generations has created great discontent among employers, who consider that, in addition to being contrary to their requests to reduce the tax effort to facilitate job creation , it will be clearly insufficient.
The anger is greater when one takes into account that a proposal of the caliber of the one transmitted yesterday by the Ministry of Social Security was delivered at the last minute, without data that would help to understand the context or the projection of the measure and in just a sheet and a half . Everything, with just two weeks to negotiate and give the go-ahead or reject it, because on November 15, Social Security will begin its processing as a parliamentary amendment with or without the social agents.
Today, with the business reaction, Minister José Luis Escrivá could hardly count on the support of the employers in his proposal for the reform and financial balance of the pension system. "Raising prices is a red line for businessmen, it is the opposite of what we are asking the Government," they explain in employer circles. Without having access to more data than the creation of a finalist contribution of 0.5% that will serve to fill in the next 10 years the pension piggy bank emptied in the last decade, distrust towards the effectiveness of the measure is total. "With a rise like this it will not be possible to cover the hole that in recent years has had to be covered with extraordinary credits: no matter how much the prices rise, the pensions of babyboomers will not be covered",these sources explain.
Therefore, the question remains as to whether it would be necessary to undertake new increases in contributions to finance the expense or if it could be reduced after at least three years after the launch of the new finalist cargo, as indicated in the document presented yesterday. Or if the increase in contributions is only part of a Escrivá proposal that includes other cost-saving measures. Social Security does not comment on a negotiation that is in progress.
Contrary to what is explained in business circles, Minister Escrivá assures that the negotiations "are going well" and that they are progressing. The head of Social Security has indicated that his proposal "does not cut any pension in any case and at any time", unlike the sustainability factor of the 2013 reform, which penalized pensioners with cuts, especially the youngest. "This mechanism simply creates a safety valve and gives the system room to reinforce its sustainability," he stressed.
The document presented yesterday indicates that, in the event that the deviation of spending is greater than 0.2% of GDP, or that the assets of the Reserve Fund have been exhausted, the Government will negotiate with the social partners "a proposal directed to reduce the percentage of spending on pensions in terms of GDP through measures framed in the recommendations of the Toledo Pact ". These measures should compensate for the deviation in the forecast of pension spending in 2050 that is not covered by the assets of the Reserve Fund with a limit of 0.4% of GDP. Also, if the foregoing is not enough, it is indicated that the Government will negotiate with the social partners new increases in the contribution rate with a limit of 0.4% of GDP.
The presentation of this rise in contributions is due to the commitment of Social Security and the social agents reached last summer to repeal the sustainability factor.
This commitment is a guarantee to Brussels that the pension system will be sustainable in the future with income or expenditure measures alternative to the repealed sustainability factor.
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