Montero says Social Security spending will rise 11.4% but says they will fill the ‘baby boom’ retirement piggy bank with nearly 3,000 million
Pensions will increase “in the environment” by 8.5% in 2023. This is the estimate that the government uses today and that the Minister of Finance and Public Function, María Jesús Montero, put forward this Tuesday during the press conference after the Council of Ministers in which he presented the budgets for the following year.
It was one of the great unknowns hanging in the air: how much can the benefits of the nearly nine million beneficiaries in the system increase. Because although the Executive has actively and passively reiterated that it will honor its commitment to revalue them based on the average CPI for the months of December 2022 to next November – which is the formula approved in the pension reform – it has so far no he had revealed how high it could go.
In any case, it should be noted that this 8.5% is the increase they estimate and may change with the data that inflation provides in November and December, when it is expected to moderate. This means that the final revaluation will be known when the CPI for November is announced, ie already in the month of December. “The prediction we have today on how this indicator is going to behave is 8.5%. It could be 8.4% or 8.6%,” admitted the Andalusian delegate.
Montero stressed that with this measure the government is in line with the Toledo Pact and stressed that “a country’s dignity is measured by the way it treats its elderly and that this government will obey the law and their standard of living will be guaranteed.” for retirees.” The Executive thus ignores the critical voices opposing a general revaluation with the CPI in the face of the escalation of prices due to the tension it may cause in the system, such as the ECB, the IMF or the Bank of Spain.
This new increase in pensions, added to the pensioners entering the system, represents an 11.4% increase in expenditure for this item, the largest increase in history.
However, the finance minister boasted that this increase will be implemented “without raising the social security deficit, which will be reduced to 0.5% this year -according to Minister Escrivá’s calculations-, a percentage that will remain predictable in 2023. In addition, it announced Montero notes that the new Intergenerational Equality Mechanism (MEI) to be implemented from January will fill the pension piggy bank with nearly €3,000 million.In concrete terms, the Executive estimates that this additional 0.6% increase in contributions from the more than 20 million workers reserve fund will irrigate at 2,957 million “For the first time in 13 years, the government is contributing to the reserve fund, giving our elderly peace of mind and improving the sustainability of our public pension system,” Montero noted.
Source: La Verdad
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