Pension Reform Talks Accelerate Amid Tight Deadlines

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The Department of Inclusion, Social Security and Immigration has scheduled another round of talks with employers and unions this Monday to push forward the second stage of pension reform under a tight, clock-driven timetable that the government aims to complete before year’s end.

After several weeks without formal meetings, the social dialogue table resumed work last Monday, focusing on two key points: extending the period used to calculate pensions and raising the maximum pension bases.

On both fronts, the Government and the social units maintain divergent positions, making the negotiations intensely challenging given the stringent deadlines.

One proposal presented by the Inclusion Ministry, reflecting the government’s view in recent years, would gradually extend the contribution window to 25 to 30 years while calculating only the best 28 years for pension determinations.

Unions have already signaled a firm rejection of including into the negotiation an element that does not appear in the Toledo Pact recommendations and which they argue does not enjoy broad political support from the Government.

CCOO’s general secretary underscored that extending the pension calculation period is not necessarily a compulsory move and noted there is no political or social consensus to advance it at this stage.

UGT echoed concerns about a striking element in the talks but left open the possibility of considering the extension if it did not entail reductions in benefits.

Regarding the maximum floors, the Government’s proposal envisions a 30% increase over 26 years, with the maximum pension rising by 3% over the same period and a plan to raise it by 30% thereafter.

Currently, CEOE resists any further rise in labor costs for companies, while the unions advocate measures that would increase the system’s revenue.

All parties anticipate a complex negotiation, although Escrivá indicated that discussions are moving in a positive direction and that the earlier environment was more uncertain in tone.

Timing remains crucial, as Escrivá aims to issue a royal decree outlining the changes to the Official State Bulletin before 31 December.

While milestones tied to Brussels this year are under discussion, other items such as the new bonus scheme for self-employed workers have seen deadlines pushed back to allow for a broader agreement on reforms.

Beyond these two central negotiation points, additional measures aimed at reducing the gender gap in pensions are also on the table, reflecting a broader reform agenda.

Last week, the Government collected all submissions from social partners to review them in Monday’s session, seeking to integrate diverse proposals into a coherent reform package. (Sources close to the process note that progress remains incremental and that consensus will require concessions from all sides.)

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