The government hopes that the Social Security Reserve Fund, better known as the retirement piggy bankend the year with 9.3 billion euros66.7% above the figure for the end of fiscal year 2023. However, despite this increase, the total amount It’s not even enough to pay 75% of what the State spends each month to pay the salaries of retirees.
According to the latest data provided by the Ministry of Inclusion and Security, the Reserve Fund exceeded 8.3 billion euros in September. The same month, pension spending exceeded 12.8 billion euros. Furthermore, and despite measures aimed at obtaining extraordinary income, Social Security continues to maintain a deficit situation.
The government’s intention is that the retirement piggy bank It will be used to reduce pressure on Social Security coffers from 2032, when it will have to face larger disbursements. This year, he will have already retired or will do so a good part of the time. generation of baby boomvery numerous and with pensions that will be higher than those of previous generations, both because of higher salaries – and contributions – and because of the annual revaluation based on inflation.
Looking back, The Social Security Reserve Fund reached its historic maximum in 2011although since 2008, due to the financial crisis, the growth observed has been lower. Anyway, in the last year of José Luis Rodríguez Zapatero, the retirement piggy bank reached 66.815 million euros.
Starting that year, Social Security began spending retirement piggy bank. These were the years of Great Recession and the cuts have exhausted system resources. Not only did he stop contributing to future efforts, but Reserve fund savings virtually wiped out. In 2019, the total amount barely exceeded 2 billion euros.
Since then, the retirement piggy bank It remained at a low level until last year, when the Intergenerational Equity Mechanism (MEI), an additional contribution that serves to inject money into the Reserve Fund, came into force. With the latest reform of the public retirement system, the Government has set itself the objective of creating savings allowing deal with moments of tension that will arrive over the next decade.
And that’s it Social Security pension spending continues to grow month after month. Disbursements already exceed 11% of Gross Domestic Product (GDP) and according to forecasts they will represent up to 16.6% of the wealth of the country.
Miguel Angel Garcíaprofessor of applied economics at URJC and associated researcher at Fedea, tells EL ESPAÑOL-Invertia that before analyzing whether the situation of the Social Security Reserve Fund is good or bad, we must get to the bottom of the things, that is to say situation of the contributory pension system. And, in this sense, the system is deficient.
“The first question is whether it makes sense to contribute to the reserve fund when we have to ask for loans of 10 billion from the State. This is totally inconsistent“explains García. In fact, the Fedea researcher points out that the contribution to retirement piggy bank in 2023, around 2.7 billion euros came from public funds. “In 2024 The Social Security deficit will exceed 7.5 billion and they will have to request 3 billion to be able to contribute to the Reserve Fund. This is all quite absurd,” he criticizes.
Although the retirement piggy bank It is theoretically filled with MEI contributions, the truth is that these arrive, like the rest of the contributions, in the Social Security coffers. And since the system is in deficit, loans must be requested so that the money actually reaches the Reserve Fund. “Conceptually this seems positive, but when analyzing the accounts it is inconsistent“, Ditch by Miguel Ángel García.
This economics professor recognizes that Reserve Fund savings will continue to grow until 2032as long as the system is designed like this, but insists on the fact that it does not make sense “to pay a contribution to pay for something in 2032 and for that to ask for a loan from the State”.
And all this for a “little relief in the future, very small”. It will be, García assures, “very little money for the obligations that will accumulate starting this year.” Thus, for this Fedea researcher, THE retirement piggy bank “It has all the characteristics of an advertising instrumentmore than an instrument capable of truly guaranteeing the financial viability of the pension system”.
