The pension piggy bank will end the year with money to cover just two weeks of expenses

2023-10-27 19:14:06

The Reserve Fund, known as the “pension piggy bank”, will end this year with 5.5 billion euros, the highest figure since 2018. This is due to contributions, for the first time, from the Intergenerational Equity Mechanism (MEI) , which came into force at the beginning of this year, as reported this Friday by the Ministry of Inclusion, Social Security and Migration. However, this increase would barely cover the payment of half a month of pensions, since pension spending recorded in October reached 12,075 million, a record figure, with an increase of 10.9% compared to the same month of the previous year. .

The Department headed, in office, by José Luis Escrivá, has highlighted in a statement that the dynamism of employment is contributing to strengthening the system by increasing income from social contributions, which grew at a rate of 9.8% until August. .

The Secretary of State for Social Security and Pensions, Borja Suárez, chaired this morning the 28th meeting of the Monitoring Commission of the Social Security Reserve Fund, the first meeting held by this body since 2018, as specified by CC OO in a release.

This commission is also made up of representatives of the Ministry of Economic Affairs and Digital Transformation and the Ministry of Finance and Public Function, as well as business organizations (CEOE and Cepyme) and unions (UGT, CC OO, CIG and USO). In addition to Suárez, the general director of the General Treasury of Social Security (TGSS), Andrés Harto, and the general auditor, Sonia Pérez-Urría, attended this meeting on behalf of the Ministry of Inclusion, Social Security and Migration.

For CC OO, this meeting is “one more sign that returns normality to the pension system and reinforces confidence in its sustainability and sufficiency.” The union has celebrated the reactivation of the work of this Commission, which coincides with the recovery of funds from the so-called “piggy bank” of pensions thanks to the income measures adopted in the last pension reform (2021-2023), specifically to the overpricing associated with the MEI, the proceeds of which are intended to increase the Reserve Fund.

This “piggy bank” was created in the pension reform of 2000 with the objective of guaranteeing a budget allocation with the contribution surpluses that were produced at that time and to be able to use them later to face the greater expenses derived from the retirements of the ” baby boomers.”

The Fund reached 70,000 million euros, but its use was anticipated as a result of the economic and financial crisis, “when it was decided to advance its consumption instead of adopting measures to reinforce income,” CC OO criticized. “A decision that, in addition to bringing the Reserve Fund to almost its liquidation, did not prevent the imposition of cuts in the 2013 reform (revaluation and sustainability factor),” added the union.

The pension reform agreed between 2021 and 2023 has aimed to reinforce the system’s income to guarantee its sustainability and sufficiency. As a result of these additional income measures, the Reserve Fund has once again had provisions during 2023 and will close this year with an asset value that will exceed 5.5 billion euros.

According to CC OO, the MEI price has raised to date about 1,450 million euros, which will increase progressively in the coming months until the end of the year, and to which we must add the surpluses of the mutual companies, which have amounted to about 1,168 million euros.

For the Unai Sordo union, “as important as the accounting result that these measures represent is the fact that the Reserve Fund, a key piece to guarantee the sustainability and adequacy of pensions in the long term, has been returned to institutional normality recovering their usual jobs”.