Reform of the public pension system
Law 21/2021, on the guarantee of the purchasing power of pensions and other measures to reinforce the financial and social sustainability of the public pension system .
With this Law, which enters into force on January 1, 2022, it is intended to guarantee the maintenance of the purchasing power of pensions through a revaluation criterion linked to the evolution of inflation.
Revaluation of pensions
The revaluation index is repealed and the recovery of the guarantee of purchasing power is established through an update of the pensions based on the inflation of the previous year.
The revaluation at the beginning of each year will be carried out in accordance with the average inflation registered in the previous year, with the guarantee that in the rare case of negative inflation the pensions will not suffer any reduction.
Every five years the effects of the annual revaluation will be evaluated, and where appropriate, a proposal for action will be made, which will be transferred to the Parliamentary Committee for Monitoring and Evaluation of the Agreements of the Toledo Pact.
Access to retirement pension
- Voluntary early retirement
The applicable reducing coefficients are reviewed, in order to promote retirement at ages closer to the legal retirement age and favor longer contribution careers.
However, the application of the reducing coefficients corresponding to retirement due to causes not attributable to the worker is allowed in the event of receipt of unemployment benefit at least three months in advance.
The reducing coefficients corresponding to this type of pension will be applied to the amount thereof, within the limits of art. 57 TRLGSS, progressively, over a period of ten years.
- Involuntary early retirement
The following modifications are introduced:
To the causes of contractual termination of art. 207.1 LGSS, the rest of the extinction causes are now added for objective reasons, as well as the voluntary resolution by the worker, in the cases provided for in arts. 40.1, 41.3, 49.1m) and 50 ET.
In addition, the applicable coefficient on the pension is now determined by month in advance of retirement and not by quarter.
Likewise, in the two years immediately prior to the ordinary retirement age, the same coefficients are applied as in the voluntary modality, in those cases in which the new coefficient is more favorable than the one in force up to now.
Finally, the reducing coefficient corresponding to each of the six months prior to the ordinary retirement age is lowered, with respect to those established for the case of voluntary retirement.
- Early retirement due to activity
The procedure for the recognition of reducing coefficients by age is reviewed.
A reference is also made to what is determined by regulation, within the framework of social dialogue, regarding the indicators that prove the concurrence of objective circumstances that justify the application of such coefficients.
The establishment of a procedure for the revision of the age reduction coefficients is foreseen, with a periodicity of ten years.
- Delayed retirement
Among other measures, the single incentive established so far established is replaced by the possibility that the interested party can choose between obtaining an additional percentage of 4 percent for each full year of effective work that he or she accredits after reaching the age of employment. retirement
- Active retirement
A condition for accessing this type of retirement is required for at least one year after reaching the ordinary retirement age.
- Forced retirement
Conventional clauses that provide for the forced retirement of the worker at an age less than sixty-eight years are prohibited.
Measures to preserve balance and equity between generations
The sustainability factor introduced by Law 23/2013, of December 23, is repealed and replaced by a new intergenerational equity mechanism, setting an additional finalist contribution of 0.6 per a period of 10 years that will nourish the Social Security Reserve Fund.