Pension reforms in Spain

A preliminary agreement was reached over the government’s proposed reforms to pension laws at midnight last night during a meeting between the Spanish President, José Luis Rodríguez Zapatero, trade union leaders and business representatives. The agreement considers raising the age of retirement to 67 years old although workers who have paid their contributions for 38 years and a half will still be allowed to retire at 65.

The agreement aimed at changing Spain’s pension laws also looks at other areas such as collective negotiation, energy, industry and innovation as well as active policies all of which will be included in a social pact.

Another meeting scheduled to take place today will set down the final details of the pact and produce a text which is expected to be presented this afternoon.

One sticking point between the government and the trade unions was the raising of the age of retirement to 67 years old with the exception of those who have paid 38 years and a half of contributions (the government pushed for 41 years at the start of the negotiating process) – more than the current law which states that workers need 35 years of paid contributions to be able to retire at 65.

In order to retire at 67 years old on a full pension workers will need to have paid 37 years of contributions. The agreement also looks at improving the recognition of contributions paid with regards to maternity leave and looking after children in order to protect groups which may have their years of contribution disrupted.

The text produced at today’s final meeting will be used in the bill which will be presented to parliament tomorrow. Spain’s main opposition party, the PP, says that it will not oppose the bill on pension reforms which means that negotiations will take place before the vote in parliament.

The Minister for Work and Immigration has confirmed that a draft agreement between all parties has been reached and that today the final details will be decided. Sources close to the negotiating table have confirmed that workers will need to have paid 38 years and a half of contributions in order to be allowed to retire at the age of 65 years old.