Discomfort at a large employer CEO with an increase in the maximum contribution base is included in the General Government Budgets by the Government. From the business group led by Antonio Garamendi, which includes a preliminary draft of the public accounts, they described the roughly 8.5% rise in expected inflation as unacceptable. They say the move would raise social security costs for companies. They also predict the decision will not help the ongoing talks for the third block of pension reform, nor a compromise on the income measures the Executive had signaled to curb inflation.
In a statement issued this Friday, the CEOE criticized the government for pushing unilateral steps that substantially affect the business sector, especially while social partners are urged to reach a revenue agreement.
Employers accuse the administration of acting behind closed doors and without social dialogue. They argue the new mechanics will force firms to accept a modest contribution increase next year, while the plan also contemplates a larger rise to the maximum pension base that would enlarge monthly pension payments.
In what amounts to an aging demographic scenario, the government envisions a kind of temporary savings tool to bolster a pension system facing pressure from a growing number of retirees. The plan aims to channel about 26,000 million euros over ten years to help fund benefits for the so-called baby boomers, a move outlined in the government’s budget documentation published in the yellow book from the Ministry of Finance last week. The treasury is projected to collect nearly 2,800 million euros in 2023, a figure cited in the same document.
Beyond the preexisting increase, which employers have opposed, there is also a proposal to raise the maximum pension by moving it from 2,819 euros to 3,059.2 euros per month. The policy is designed as one pillar in a broader pension negotiation, alongside adjustments to the years used to calculate final benefits and other variables tied to long-term pension sustainability.
Employer feels cheated
The CEOE maintains that including this increase in the preliminary General Budget draft, alongside other pension measures, is misleading. They point to a special table prepared with social partners to handle this issue, which met only once the prior Monday. They argue that presenting a decision without prior notice undermines social dialogue and credibility.
The approach attributed to José Luis Escrivá, the Minister of Inclusion and Social Security, is to negotiate a staged elimination of the maximum contribution bases while pursuing a substantial rise in the maximum pension. The administration seems to intend to raise funds from higher-income workers to strengthen the public pension system’s finances.
Ongoing social dialogue negotiations are facing difficulties, and the upcoming elections scheduled for November 23 add pressure on the CEOE leadership. At present, the only candidate publicly aligned with pushing this agenda is the current president, Antonio Garamendi, who has faced internal disagreements on critical issues, including support for reforms in the labor market.