Towards an adequate and sustainable replacement rate in defined benefit pension systems: The case of Spain

The Public Pension Systems and the Economic Crisis

Concern about the long-term sustainability of European public pension systems has been a permanent feature for decades due to the unstoppable ageing of the population, but demographic change is not the only factor of concern. A deep economic and financial crisis has been added to this structural problem, whose impact on economic growth and job creation has further aggravated the situation. The combination of these two challenges has created a “perfect storm”, which is forcing most European countries to introduce far-reaching reforms in their pension systems with the aim of ensuring their sustainability. This chapter analyses the main measures that the different EU-28 countries have addresse…

The effects of recent Spanish pension reforms on sustainability and pension adequacy

ABSTRACTThe Spanish pension system has been recently reformed as a response to the demographic challenge and with the objective of ensuring the sustainability of the pension system in the long-term. The overall reforms include changes in the majority of the system parameters, a new indexation rule and a sustainability factor that links life expectancy and the first pension amount. The aim of this work is to analyse how these reforms affect two important features of a pension system: fiscal sustainability and adequacy. For this purpose, the real internal rate of return (IRR) of the lifetime contributions and benefits and the prospective gross theoretical replacement rate (TRR), both before a…

Equity of Public Pension System

Fairness is an important feature of pension systems, but it is a wide concept with multiple sides. In this chapter, we try to distinguish some of them with the aim of using the terms in a proper manner. More specifically, we have observed at least five meanings for the notion of fairness when applying to a pension system: justice, equity, neutrality, solidarity and integrity. We explain each sense of fairness and other related concepts. We also provide, when possible, a way to measure each of them, with some figures for a selected European countries.

La mejor estrategia para la jubilación de los autónomos

La jubilación es uno de los retos a los que se enfrentan los ciudadanos y, naturalmente, también los trabajadores autónomos. Las peculiaridades del régimen especial de la Seguridad Social al que están adscritos, como es escoger anualmente su base de cotización, permite que los autónomos puedan diseñar una estrategia que mejore notablemente su pensión de jubilación. En este trabajo se demuestra que esta flexibilidad convierte a la pensión de jubilación de la Seguridad Social en una de las inversiones más rentables y se propone una recomendación para conseguir la mejor pensión, con un coste mínimo o, alternativamente, puede entenderse en el sentido de que se señalan las medidas de política qu…

The minimum pension and its effect on the gender gap in retirement pensions in Spain

The gender gap in pensions is greater than the gender gap in wages in the majority of countries in the European Union. Similarly, more women live on a minimum pension than do men. Therefore, the me...