Fedea criticizes “fictitious contribution” to the ‘piggy bank’: “It is done with debt”
The sustainability of the system of pensions (measured through the internal yield, the contributory IRR) is above the economic growth observed in the last 40 years, which would indicate “Background or structural unsustainability in the system”, According to the Foundation of Applied Economics Studies (Fedea @Socialfedea), in a study in which he criticizes the “inequities” of the Spanish system.
The report, An actuarial vision of the pension system, has been prepared by José Enrique Devesa (@Devesacarpio), Immaculate Domínguez Fabián, B. Encinas and R. Meneu, from the universities of Valencia and Extremadura and Polibienestar. After discounting the complements of solidarity and the influence of the different life expectancy of men and women, they conclude that the system “Give a better treatment to short contribution races in front of the long ones, to the ordinary and delayed modality in front of the anticipated Already the high regulatory bases in front of the casualties. “
For these Fedea experts, the unsustainability It can be faced in various ways. One of them, to trust that the economic growth In the long term, it is higher than that historically observed and is around 2.6%, which would allow to cover the unsustainability and, meanwhile gap and, meanwhile, Use state transfers to compensate for the imbalance between contributions and pension expense. This is the politically chosen option after the recommendation of the Toledo Pact, “which runs the risk of increasing state debt or taxes,” Fedea warns.
“Comparative grievances” between workers
“The sustainability of the public pension system is no stranger to the sustainability of the whole public finance. State transfers to pay non -contributory concepts of pension spending is something logical given the redistributive objective of this type of items. It is more doubtful, from a point of view of coherence, use transfers financed with general taxes to pay contributory pensions. The legitimacy of this type of practice is not discussed That contributory pensions are paid with taxes, but their coherence, “says Fedea’s experts.
In this line, they consider that Use taxes to pay pensions contributory can generate Comparative grievances Between workers.
In addition, transfers to pay contributory expenses involve a transfer of the deficit of a part of public administrations, Social Security, to another, the General State Administration.
Retire later and upload pensions less than CPI
Undertake new parametric reforms, Instead of increasing state transfers, it is Fedea’s proposal, among them, revalue pensions below the CPI, Increase the type of contribution to increase tax revenues or change the percentage allocation scale for years quoted.
Other proposals go through Increase ordinary retirement age, either linking those increases to the evolution of life expectancy at 67 years or with specific changes, and increase the period of calculation of the regulatory base to a whole working life.
In addition, they insist that, to achieve tax and actuarial equity, both intra and intergenerational, a system of notional accounts.
However, given the political difficulty to agree on this measure, they propose to assign the same percentage per year quoted and Take into account work life To calculate the regulatory base.
Miguel Ángel García criticizes the lack of generational equity
Also very critical of the “unsustainability” of the Spanish system is Miguel Ángel García Díaz (@Magarciadiaz), Professor of Applied Economics at the Rey Juan Carlos University and Fedea researcher. Warns that the current system implies a deterioration of intergenerational equity and compromises other essential policies of the welfare state, moving a very high cost to young people.
Garcia warns that ” quotes do not cover pension spending contributory (around 71%), and remember that last year the State made transfers to social security equivalent to 3.8 points of GDP, and that in the coming years these contributions of money will grow another 2.7 points.
In his opinion, “Paying pensions increasingly depend on general taxes And less of quotes, and that must be explained to society, citizens must know what that implies, that is, or pay more taxes or accumulate more debt. “
