Spanish Minister Defends Pension System Sustainability Amid Fiscal Authority Critique
Elma Saiz asserts no 'magic number' exists for pension system sustainability while seeking updated assessments before 2026.
Elma Saiz, the Minister of Inclusion, Social Security and Migration in Spain, has stated there is no 'magic number' for the sustainability of the pension system, advocating against alarmist reactions to the government's request for an additional report from the Independent Authority for Fiscal Responsibility (Airef) before June 1, 2026. Minister Saiz emphasized the need for an updated overview of the system's sustainability during her appearance before the Commission for Monitoring and Evaluation of the Toledo Pact agreements.
In March, Airef’s first report post-2021 pension reform indicated the government narrowly met its spending rule but warned of unresolved sustainability issues in the system.
The fiscal authority criticized the spending rule as an inadequate indicator that diminishes both oversight and independence.
According to Airef, European Commission forecasts, reflecting data from 2022 and 2023, project pension spending to reach 14.6% of GDP between 2022 and 2050, against a ceiling of 15%.
The report estimates revenue measures to contribute an additional 1.4%, which results in a net pension spending of 13.2%.
A threshold of 13.3% is noted for triggering additional contributions via the Intergenerational Equity Mechanism (MEI), factoring in state transfers for pensions as income.
In response to criticisms from Airef, the government modified Royal Decree 100/25 to require the fiscal authority to submit a report within a year, bypassing the previously scheduled three-year evaluation period.
Saiz characterized Airef’s estimates as 'prudent' but acknowledged existing 'technical differences' between the Ministry and Airef, highlighting concerns that the fiscal authority does not fully account for the impact of job quality.
This includes increased employment in high-value sectors, reduced temporary contracts, and longer employment contracts.
Regarding state transfers, Saiz asserted that the directive issued to Airef in February, stating these transfers should be included as part of public pension system income, does not compromise the independence of the oversight body.
Airef admitted to partially adopting these recommendations, recognizing state transfers as income within the broader Social Security framework, which encompasses pensions.
In March, Airef’s first report post-2021 pension reform indicated the government narrowly met its spending rule but warned of unresolved sustainability issues in the system.
The fiscal authority criticized the spending rule as an inadequate indicator that diminishes both oversight and independence.
According to Airef, European Commission forecasts, reflecting data from 2022 and 2023, project pension spending to reach 14.6% of GDP between 2022 and 2050, against a ceiling of 15%.
The report estimates revenue measures to contribute an additional 1.4%, which results in a net pension spending of 13.2%.
A threshold of 13.3% is noted for triggering additional contributions via the Intergenerational Equity Mechanism (MEI), factoring in state transfers for pensions as income.
In response to criticisms from Airef, the government modified Royal Decree 100/25 to require the fiscal authority to submit a report within a year, bypassing the previously scheduled three-year evaluation period.
Saiz characterized Airef’s estimates as 'prudent' but acknowledged existing 'technical differences' between the Ministry and Airef, highlighting concerns that the fiscal authority does not fully account for the impact of job quality.
This includes increased employment in high-value sectors, reduced temporary contracts, and longer employment contracts.
Regarding state transfers, Saiz asserted that the directive issued to Airef in February, stating these transfers should be included as part of public pension system income, does not compromise the independence of the oversight body.
Airef admitted to partially adopting these recommendations, recognizing state transfers as income within the broader Social Security framework, which encompasses pensions.
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