The Secretary of State, Social Security and Pensions, Borja Suárez, explained during the events commemorating the 30th anniversary of the Toledo Pact, that Spain “cannot afford to wait thirty more years” to address the two major structural problems facing the current pension system. One of them is the aging population and the other, the gender gap that continues to exist in benefits.
In a conference organized by Santa Lucía and Fedea, the representative of the Ministry of Elma Saiz highlighted that it is necessary to continue maintaining the capacity for consensus that has always accompanied the negotiations on the improvement and pension sustainability.
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Suárez has always defended the importance of maintaining the purchasing power of the elderly and assured that, to achieve this, it is essential to continue relying on social contributions. “The main contributing factor must continue to be contributions,” he assured. For the Secretary of State, the balance of these decades of operation of the Toledo Pact is “reason for optimism” since it has allowed pension reforms to always be supported by the axes of social, financial, legal and political sustainability.
“The common objective has always been to preserve the sustainability of the public system”
The former Secretary of State for Social Security, Octavio Granado, announced during the event the report titled ‘The Toledo Pact on its 30th anniversary: the uniqueness of a Spanish institution’. Granado highlighted that this agreement has prevented, over the years, pension policy from being a factor of instability.
“The merit of the Toledo Pact is to maintain institutional loyalty and political consensus around a common objective, which is to preserve the sustainability of the public system.” But he issued a warning about the demographic challenge and that is that “if we want the generational change to continue to be possible, we need people in Spain to continue having children.”
In the successive round tables, the experts agreed on this idea, ensuring that accelerated aging, changes in the labor market or the arrival of new forms of employment will set the agenda for pension reform in the coming years.
No details on measures to reduce the gender gap
The Ministry did not detail what measures will be carried out to reduce the gender gap in pensions and did not give a deadline for these new reforms. Another aspect that needs to be considered is how the INE’s population growth forecasts will affect the financial sustainability of the system in the medium term.
The labor market is more dynamic than a decade ago, with unprecedented demographic pressures and a pension spending that represents more than 12% of GDP.