Reform to reassess 89,000 minimum pensions in Alicante
The pension reform proposed by José Luis Escrivá, the minister responsible for Social Inclusion, Social Security and Immigration, has been approved by the unions after adding new improvements to the initial document. Among the changes is a revaluation that directly affects residents of Alicante, ensuring that 89,000 minimum pensions no longer fall below the poverty line by 2027. Employers, while acknowledging the reform, reiterate concern about increased costs for businesses. In recent meetings, the governing bodies of CC OO and UGT supported positions that had already been voiced earlier. They, however, succeeded in convincing the government to push for a higher increase in minimum pensions. Beginning in 2027, the minimum amount of a contributory pension for a person over 65 with a dependent spouse must exceed the poverty threshold calculated for a two-adult household, using the latest INE data from 2021 and adjusted by the CPI. The gross annual amount climbs to 14,302 Euros. Consequently, the pension must surpass 1,020 euros gross in each of the 14 annual payments, up from the current 966 euros.
Improvements are also planned for retirees who do not have a spouse. The government aims to steadily reduce the current deficit each year until this target is reached in 2027. These measures will benefit approximately 89,000 pensions in Alicante, where 332,000 people currently contribute to the system in the province. The reform also increases the maximum contribution bases. Presently, the exact figures are not published due to their comprehensive nature, and there is a ceiling beyond which contributions are not taxed. The public treasury currently records 4,405 Euros per month as the threshold; once this point is reached, salary contributions stop, leading to cost savings for employers. The plan is to gradually raise this limit to generate higher revenue. Future retirees will also be able to choose between maintaining the current 25-year calculation period for pensions or extending it to 29 years, with the option to deduct the worst 24 months of contributions.
Another element of the reform targets a tighter funding of the system by taxing wages above 4,500 Euros gross per month. This is intended to bolster the maximum contribution base and is framed as a solidarity measure, without conferring tax benefits to some higher, unquoted salaries. After the agreement was reached, José Luis Escrivá emphasized that the modernization of the pension system has been gradual and prudent, designed to strengthen revenue without harming the productive sector or the Spanish economy. The UGT’s general secretary, Pepe Álvarez, stated that the signing brought a sense of satisfaction and balance to the reform, noting that future changes would require explanations to the public about who bears the costs. Unai Sordo, secretary of CC OO, highlighted that the agreement ensures the long-term viability and sustainability of pensions. He stressed that providing certainty to citizens is essential for the next 25 years. The Toledo Pact reform drew criticism from parties such as PP, Vox, and Ciudadanos, while receiving the backing of PSOE, Unidas Podemos, ERC, and EH Bildu.
Overall, the reform aims to modernize pension governance while expanding the system’s resilience. In Alicante, these changes are set to protect a substantial number of retirees and align benefits with living costs measured by official statistics. The agreement emphasizes a steady path toward fiscal balance, with a focus on social fairness and the long-term health of the pension framework. (Source: government release and union statements; attribution noted in coverage of the agreement.)