The pension reform approved in March by the then Minister of Inclusion, Social Security and Migration, José Luis Escrivá, gradually incorporates the measures agreed with the European Commission. The plan drawn up by the Government to convince Brussels that the sustainability of the pension system is guaranteed in the long term involves improving income from social contributions, without rationalizing spending. In addition to the Intergenerational Equity Mechanism (MEI), the ‘surcharge’ that is applied to all payrolls and will go from 0.6% to 0.7% Next year, the projected increase in the maximum contribution bases will be carried out by applying the new formula: average variation in inflation plus 1.2 additional points. This calculation will limit the maximum bases to around 5%, reaching salaries of 56,600 euros per year.
The average inflation forecast for this year will close within the range of 3.6% and 3.9%. The Social Security Law, urgently updated in March to approve a reform that was already outside the committed deadline, establishes that the maximum contribution base grows with average inflation plus those 1.2 additional points. As the current maximum base is close to 54,000 euros, an update of between 4.8% and 5.1% It would move this limit to the range of 56,600 euros to 56,750 euros per year.
The novelty of this reform is that it establishes a specific calculation and a methodology to update the upper limit of contributions that goes beyond the price variation. Previously, Experts called the increase in maximum contribution bases the ‘silent reform’since historically it has risen through the General State Budgets (PGE).
It is also important to highlight that the plan to raise the maximum base, which starts in 2024 and will last until mid-century, will widen the gap with the system’s maximum benefit, which will rise slightly above inflation.
Who will it affect the most?
The Bank of Spain explains, based on data from Social Security itself, that there are 1.3 million affiliates (almost 7% of the total) in the maximum contribution base, with a greater presence of men than women ( 8.2% versus 5.1%).
The growth of the maximum contribution base will have an unequal impact between workers and companies, as will the plan to increase social contributions among all workers’ and companies’ payrolls. The reform “is characterized heterogeneity between workers and companies with respect to the incidence of the legal ceiling established on the contribution base“, pointed out the organization.
Middle-aged workers are the most affected by this stoppage and by the solidarity quota that begins to be applied with the new pension reform. Between 44 and 63 years old, 8% of workers are at the maximum base. Special incidence for workers aged 60 and 62, since more than 10% are in that upper limit.
Large companies, due to their economic capacity, have more room to raise salaries. This is demonstrated by the number of workers they have as a maximum base: 9.7% of the workers of large firms (between 50 and 500 employees) and 13.8% of the salaries of very large companies (more than 500 positions). ).
The most affected sectors, as reflected by the Bank of Spain, are the financial services industry, business management consultants, computer services or health services. In these four sectors, the ratios of workers subject to the maximum base would be 54.4%, 20.2%, 19.3% and 17%, respectively.
However, workers with salary income that exceeds the maximum expected base will not escape the effects of Escrivá’s latest reform either. For the salary range that exceeds this limit, the Government has created the so-called solidarity quota. It imposes sections and the applied rates will vary between 0.92% and 1.17% next 2025 and will increase year by year until reaching a minimum rate of 5.5% and a maximum rate of 7% in 2045.