¡Descarga The Spanish Public Pension System: Main Features, Regimes, and Reforms y más Apuntes en PDF de Ciencia Política solo en Docsity! The Public Pension System in Spain: The main features of the Spanish social security system and supply some key data. The current system provides the following types of protection: • Contributory social insurance programs, organized along occupational lines. These programs award benefits to compensate for revenue no longer earned because of sickness, accident, unemployment, family responsibilities, disability, old age, or death. The amount payable depends on how much has been contributed over how long. This type of protection is financed by contributions from employees and/or employers, and is run by the state. • Noncontributory protection, the purpose of which is to provide financial cover for disability, old age, unemployment, and family responsibilities. The amount payable is the same for everyone and conditional upon the beneficiary’s lack of resources. This type of protection is financed and run by the state through taxation. •A universal benefit basically consisting of healthcare and social services, open to everyone and financed at present through a mixed system of social security contributions and money from the state. • Alongside the previous three types of state-run protection, there also exists a complementary system of privately run protection. Its most visible forms are friendly societies, group life insurance, and pension plans and funds. We will concentrate mainly on the first type of system, the contributory social insurance programs. The contributory system is structured in different “regimes” or systems, each of which covers a group of workers of a particular type. 1. General System. This is the essential nucleus of the system as a whole and includes all employees over 16 not included in another “special system.” The general system accounts for 60 percent of pensions and 75 percent of contributors. Its spending on pensions was 6.49 percent of GDP in 2003. This regime has a surplus of 1.08 percent of GDP. 2. Special System for the Self-Employed. This includes everyone who works for themselves or is not dependent on an employer (apart from those covered by the special systems for agricultural or fisheries workers). It accounts for 17 percent of contributors and pays out around 13 percent of pensions. Its spending on pensions was 0.84 percent of GDP in 2003. This regime has a surplus of 0.25 percent of GDP. 3. Special System for Agricultural Workers. This includes all those who normally work in agriculture, in forestry, or with livestock. It covers those who are employed by someone else as well as those who have their own smallholdings. It accounts for 21 percent of pensions and 7 percent of contributors. Its spending on pensions was 1.31 percent of GDP in 2003. This regime has a huge deficit of 1.12 percent of GDP. 4. Special System for Fisheries Workers. This includes all employed and self-employed workers involved in fisheries activities on land and at sea. It accounts for 1.8 percent of pensions and 0.46 percent of contributors. This regime has a deficit of 0.15 percent of GDP. 5. Special System for Coal Mining. This applies to all those employed to work in coal mines. It accounts for just 0.1 percent of contributors but pays 1 percent of pensions. This system has a deficit of 0.13 percent of GDP. 6. Special System for Domestic Staff. This covers those who provide exclusively domestic services for one or more heads of family. The services must be provided in the house where the head of family lives, and a wage or payment must be received in exchange. This regime accounts for 1.14 percent of contributors and pays out 2.8 percent of pensions. It has a deficit of 0.13 percent of GDP. 7. Apart from the special systems mentioned above, there are others covering civil servants, the armed forces, and the judiciary. The most important of these is the system for civil servants. Coordination between the general and the various special systems is assured because the system is based on the following principles: (1) a common legal basis for the system as a whole, (2) unique one-off registration details regardless of transfers between systems, and (3) reciprocal calculation of quotas between the partial systems that make up the system as a whole. The most relevant rules for determining the amount of retirement pension are: • The pension base is calculated according to contributions made during the last 15 years of work. Contributions for the 24 months immediately prior to retirement are taken at nominal value, while previous contribution rates are revalued in line with the retail price index (RPI) for the months up to and including the 25th month before retirement. From this date the period of contribution rates taken at nominal value begins. • In the case of the general system, the pension is determined by applying the corresponding replacement rate to the pension base. This is variable according to the number of years contributed. A sliding scale is applied, starting at 50 percent after 15 years of contributions, rising by 3 percent for every additional year from the 16th to the 25th, and by 2 percent from the 26th year up to a maximum of 100 percent for 35 years. When retirement pension is first claimed after age 65, a rate of 100 percent is applied plus an additional 2 percent for every full year contributed after that age, always assuming that 35 years contributions have already been paid. The minimum retirement age is 60 years. • The replacement rate is reduced by between 6 percent and 8 percent for each year the retirement age is brought forward from the legal retirement age of 65. • The pension increases annually in line with the RPI. The main problem faced by the Spanish pension system: the ratio between the number of contributors and the number of pensions. As far as the totals are concerned, a
