The president of the Mutua Group, Ignacio Garalda, called for a “deep” reform of the pension system focusing on the recommendations launched by the European Commission, which recommended strengthening automatic commitment to employment pension plans as a supplement to public pension. “We cannot delay solutions any longer,” he said. “It is time to act,” he insisted, “because we cannot continue to postpone the search for an effective and lasting solution.”
Garalda, who was responsible for initiating the Pension Observatory presentation, pointed to the sustainability of the pension model as one of the main challenges facing Spanish society at the moment. He pointed out that “we have a pension system that spends more than it collects, even in years of favorable economic conditions,” noting that spending on pensions will reach about 216 thousand million in 2025, with the need to transfer 50 thousand million by the state. This amount is equivalent to 3% of Spain’s GDP and the entire public deficit expected for the full year, he warned.
Given that “almost all retirement savings are in the public system,” Garalda argues that the search for a solution based on higher income will lead to resignations, either due to contributions or transfers from the state, with greater pressure on public spending. He therefore warned that this would only lead to a loss of resources allocated to other items such as health or education.
The director set a “clear” example to imitate the Basque model supported by the Voluntary Social Security Service (EPSV). This enterprise has assets equivalent to 32% of GDP and a membership representing 25% of workers. He stressed that “the figures show clearly higher records than private pension plans in Spain as a whole, where assets represent only 8% of GDP and only 14% of workers have an employment plan.”
The “problem” of contributions
But experts believe that implementing this project entails some difficulties. “We want there to be a complementary system, but we don’t want to make contributions,” said Carlos Bravo, Secretary of Public Policy and Social Security at CCOO. During his speech at the “Supplementary Retirement Systems in Spain” committee, he pointed out that one of the main problems is the lack of development of supplementary systems and the fact that bricks are still the preferred destination for Spaniards’ savings. According to the data you provided, 74% of savings in Spain are in real estate.
Bravo also criticized the Employment Pension Fund’s public promotion initiative, which has not yet taken off. He added: “There was an attempt to promote a sovereign fund without the promoter pumping money despite his control,” after warning that the lack of a stable parliamentary majority makes “in-depth discussion” about pensions difficult.
In parallel, the President of UNISPA – the Insurance Employers Association -, Merencho del Valle, expressed her optimism about the recommendations made by the group’s Executive Director, which she considers an incentive; While President of Inverco, Angel Martinez AldamaHe pointed out that the Ministry of Finance is saving 580 million euros as a result of reducing the deductible limit on contributions to simplified retirement plans from 8,000 euros to 1,500 euros.
In contrast, these investment vehicles have seen their fund flows decline by $12.5 billion over the past five years. He explained that “economic growth and productivity depend on the development of retirement plans.”