Escrivá foresees that the pension piggy bank will reach 120,000 million in 2040

The Minister of Inclusion, Social Security and Migration, José Luis Escrivá, has indicated that the reserve fund, the so-called “pension piggy bank”, will have between 120,000 and 130,000 million euros at the beginning of the 2040s Currently, the endowment of the fund is around 3,000 million.

In the press conference after the Council of Ministers, Escrivá explained that this fund will be nourished by the contributions of the intergenerational equity mechanism (MEI) and the increase in social contributions that has come into force this year and that will grow from 0 .6% to 1.2% in 2050. This mechanism aims to offset the increase in pension spending derived from demographic pressure and the decrease in Social Security income.

More information

The minister communicated his estimates this Thursday, during the press conference after the approval of the last block of the pension reform. In his opinion, the MEI reflects “to what extent” “robustness elements” have been introduced to face the decade of the 30s and 40s, when there will be “more tension” in the pension system. As of 2050, the minister ventured that the situation will improve due to the demographic evolution of the country.

Starting in 2029, the MEI will begin to accumulate 6,000 million more each year and, although the funds can begin to be used from the year 2032, Escrivá indicated that they will be “prudent disbursements”, which will allow the funds to continue growing until 2040, as they are greater income than cash outflows. For the moment, this year, a contribution of 2,957 million to this reserve fund has already been included in the General Budgets, the first contribution in thirteen years, from the intergenerational equity mechanism.

Reinforce income

The central point of the pension reform will be to guarantee income and with it, the solvency of the system. The aging of the population and the arrival of the so-called baby boom generation at retirement age are unbalancing income and compensation. The Executive’s response involves increasing the maximum contribution bases for workers, by including a solidarity quota for the highest wages of 1% in 2025 that will go up 0.25 points a year until reaching 6% in 2045 and by the increase in the equity mechanism.

Follow all the information on Economy and Business on Facebook and Twitteror in our weekly newsletter

Five Days agenda

The most important economic appointments of the day, with the keys and the context to understand their scope.

RECEIPT IN TU CORREO