Pension reform: sustainability, gender gap and minimum pensions

Automatic summary, not yet reviewed

1. The sustainability factor is replaced by the Intergenerational Equity Mechanism: an additional contribution of 1.2 percentage points that goes to the Social Security Reserve Fund, effective January 1, 2023 through 2050.
2. The maximum contribution base rises every year from 2024 to 2050, adding 1.2 percentage points to the inflation adjustment. In parallel, the maximum pension rises from 2025 with an additional cumulative increase of 0.115 points each year.
3. A new solidarity contribution is created for wages above the maximum contribution base, with rates of 5.5%, 6% and 7% by bracket, applied gradually from 2025 to 2045.
4. The retirement pension calculation changes: 27 years of contribution bases are used (29 years of reference), automatically dropping the 24 lowest bases. People retiring between 2026 and 2040 can apply the previous rule if it is more favorable.
5. The gender gap supplement is improved: it is extended to men who meet certain conditions, and its amount rises by an additional 10% in 2024 and 2025.
6. Minimum pensions are strengthened: from 2027 the minimum retirement pension with a dependent spouse cannot be lower than the poverty threshold for a two-adult household, and other minimum pensions move progressively toward that reference.
7. Part-time work counts the same as full-time work to meet contribution periods, and the periods of leave to care for family members and reduced working hours counted as fully contributed are extended to three years.
8. Students doing training or external academic internships are included in Social Security, with a 95% reduction in common contingency contributions and no contribution for the Intergenerational Equity Mechanism.

Who it affects

• People retiring in the coming decades: Their pension will be calculated under the new 27-year rule, though they can apply the previous rule if it is more favorable.
• High-wage workers: They will contribute more due to the higher maximum base and the new solidarity contribution.
• Employers: They bear most of the new contributions (MEI and solidarity) and must report contributions to employment pension plans.
• Women with irregular contribution histories: Rules for filling contribution gaps improve, and the gender gap supplement is strengthened.
• Student interns: They are included in Social Security with reduced contributions.

Words worth knowing

Base de cotización

The amount on which Social Security contributions, and later the pension, are calculated.

Base reguladora

The average of contribution bases used to compute how much pension a person will receive.

Mecanismo de Equidad Intergeneracional (MEI)

An extra contribution paid by employers and workers to strengthen the Reserve Fund and support future pensions.

Fondo de Reserva

The Social Security rainy-day fund: money set aside to pay pensions when income falls short.

Umbral de la pobreza

The income level below which a person or household is considered to live in poverty.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries