Organization for Economic Co-operation and Development (OECD) He focused doubly on the Spanish pension system. he Think tank It has drawn attention to Years of working life used to calculate these benefits.
Exactly, he warned that Spain – along with France-They are the only countries rich Which Use under 35 years for the aforementioned account. The OECD list also includes Colombia and Costa Rica.
That Spain uses a relatively small part of working life It makes initial pensions higherwhich raises questions System sustainability.
For this reason, the foundation run by Matthias Cormann advised that the period be extended.
Although it acknowledges that it has taken a step towards “best practice” by extending the reference period to a better 29 years, it proposes to go further and It takes 35 years to promote financial stability From the pension model
In Spain, today’s retirement calculation is based on Two big reforms Series still under publication.
The first, approved in 2011, gradually lengthens the counting period From 15 to 25 years, It is a transitional process that will culminate in 2027 and which has already been integrated into the majority of new pensions.
The second, sealed in 2023, does not replace the previous, but imposes and expands it even further.
This package from 2026 offers a dual system that allows for phasing From the current 25 years to a maximum of 29 years, With the possibility of leaving the months with the worst prices.
From there, Social Security will calculate the regulatory rule by selection The most convenient option For each new retiree, once the initial pension is determined, it will be updated With inflation measured for each year.
This ensures automatic increases in these benefits, but also Increases the cost of overhead accounts in a sustainable way.
For example, The pension contribution will increase by 2.6% in 2026. The increase in 2025 was 2.8% and in 2024 it was 3.8%.
They follow increases of 8.5% in 2023 and 2.5% in 2022, to name a few recent increases.
Other models
in FrancePensions are calculated from the public system at the average of the best 25 years of salary. in Costa Rica The last 25 years of professional life are taken as reference.
Colombia It’s a hybrid situation. The rule lets you choose between two options: the last 10 years of contributions or the average of your entire working life, with the option most convenient for the worker applying.
Spain, therefore, a Rare bird. The norm among developed countries It is the use of the entire working profession As a basis for calculation, either through points systems or Default Defined Contribution (NDC) plans.
This is the case in Austria, Belgium, Canada, Germany, Italy, Japan, Korea, the Nordic countries or a large part of Eastern Europe.
When they do not use the entire working life, they tend to use Higher calculation periods Of those in Spain.
Portugal uses the best 40 years, while Slovenia and the United States use the best 35 years.
Why does it matter?
The calculation period is not a simple technical matter, as it determines which part of an individual’s working life is taken into account to determine the pension.
Many professional careers start with low salaries and progress through a period of progress They usually end up with the best salaries in the latter part.
That means, if you just look at the last 25 years, A large portion of them are ignored Bad years. The result is Higher initial pension than if calculated over 35 years or over the entire working life.
In Spain this translates to Replacement rate – The percentage of the last salary covered by the pension – Among the highest rates in the Organization for Economic Cooperation and Development, While expectations Pensions spending on GDP They put our country first From the club For the coming decades.
29 years is not enough
Combine short calculation and pension revaluation with inflation and Increasingly aging population Increases pressure on public accounts.
The warnings don’t just come from the OECD. Vidya He has particularly criticized the recent pension reform.
The organization’s economists point out in their evaluations that extending the calculation period up to 29 years, with the possibility of eliminating 24 years. Bad months It reduces future spending quite a bit.
What he proposes is to gradually extend the pension calculation period For all working life, no returns allowedand tighten other criteria for accessing retirement.
The obvious goal is to “reduce the current interest rate.” This is it Reducing the relationship between pension and salary It means that the regime stops being “excessively generous with its resources.”
The problem is not just how much you pay, but how long it will take. Life expectancy at retirement continues to increase, effective retirement age is not rising at the same rate and the shareholder base is suffering due to demographics and job insecurity.
In this context, any parameter that increases the average pension – such as a short calculation period or a complete revaluation with inflation – acts as an accelerator. It is indeed a structural imbalance.
Added to this is stress The so-called retirement piggy bank. After years of practically running out of stock, Reserve fund It closed 2024 with around €9.4 billion thanks to additional contributions, especially from the Intergenerational Equity Mechanism (MEI).
Although this number represents a recovery compared to previous years, it is still so Insufficient compared to the cost.
This is why Social Security requires transfers from the state More than 40 thousand million euros to balance accounts and ensure the disbursement of pensions.
This consolidation has become a structural element in a system that relies on state budgets to maintain its short-term sustainability.