2023-06-28 19:42:49
The Government has managed in the first six months of 2023 to reverse the trend and begin to fill the depleted piggy bank of the pensionswhich currently stores a total of €5.3 billion. The entry into force on January 1, 2023 of the intergenerational equity mechanism (MEI), an increase in social security contributions that governs all wage-earners and that is mostly borne by companies, begins to feed what is known as the Social Security reserve fund. However, the funds currently available to pay for future benefits represent 10% of the total available 10 years ago, when first Jose Luis Rodriguez Zapatero and then and with greater zeal Mariano Rajoy they had to resort to the piggy bank to pay for the expenses then assumed from the Social Security.
The peak of the reserve fund was reached in 2011, when they came to store 66,815 million euros. From then on, the available funds began to dwindle, the flow of income affected by the economic crisis and massive layoffs. Fewer people contributing translated into less disposable income. At the same time as expenses today classified as improper by the current Minister of Social Security, Jose Luis Escriva, they ascended. The reserve fund was exhausted until it reached a minimum of 2,138 million euros, in 2019.
For the first time in five years, the Social Security piggy bank experiences a substantial increase in its available funds, although they are still far from the periods prior to the outbreak of the housing bubble. In the first six months of the year this ‘mattress‘ has gone from the 2,141 million euros available to 5,300 million euros. It has doubled, although its amount is still very poor.
To put it in perspective, the State pays some 11,997 million euros each month (more than double what the piggy bank contains today). If it is taken into account that in June Social Security paid the extra summer pay, the disbursement for that month amounted to 23,692 million euros. That is to say, with the available funds it is not enough to pay even a quarter of that payroll.
progressive increase
“According to Social Security forecasts, the fund will end 2023 with a value of 5,347 million, which represents its highest level since November 2018, thanks to the income from the MEI and the surpluses of the Mutual Insurance Companies collaborating with Social Security. , after endowing the stabilization reserve for professional contingencies,” the Ministry reported on Wednesday.
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The forecast is that this piggy bank will continue to get fatter in the coming years. On the one hand, due to the increase in the active working population, which currently stands at 20.8 million people, its all-time high. And, on the other, the entry into force from next year of the last package of measures in the field of pensions. This includes an increase in MEI social contributions and, in turn, the progressive increase in maximum contribution bases and the surcharge on the highest wages. Measures with which the Government hopes to go on feeding the pension piggy bank and accumulate enough cushion to pay for benefits in the future, in which there will be more retirees and fewer active workers.
This latest pension reform, which will be rolled out in layers until 2050, has been validated by the European Union, although organizations such as the Independent Authority for Fiscal Responsibility (Airef) or the Bank of Spain have criticized that it overestimates its revenue-raising capacity. and that new measures will be necessary, whether adjustment or new income, to make the system sustainable.
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