Thursday, July 7

Social Security raises incentives for companies not to lay off the oldest veterans | Economy

The Minister of Social Security, José Luis Escrivá.
The Minister of Social Security, José Luis Escrivá.Cézaro De Luca / Europa Press

The Social Security has raised bonuses in the contributions of workers older than 62 years when they are off. The Government has announced this to Brussels in the recovery plan: “Benefits will be established for companies that keep these older workers.” The objective is to reduce labor costs so that companies do not dispense with these employees and they are not forced to retire earlier due to the inability to find a new job. The measure has been specified in negotiations with unions and employers.

One of the main objectives of the Government in the first part of the pension reform is to delay the real retirement age, now at an average of 64.6 years, and bring it closer to the real one, between 65 and 66 years in 2021 (and between 65 and 67 years in 2027). “The reform aims to show the population the convenience of delaying the retirement age and creating incentives for it,” explains the recovery plan sent to the European Commission in the component on pensions. The same document adds: “Early retirement must become an exception.”

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For this, it proposes measures that, on the one hand, discourage early retirements —especially voluntary ones— and, on the other, reward those who decide to continue in the labor market after reaching the age at which they can legally retire. It also seeks to prevent companies from dispensing with these workers by greatly limiting the so-called forced retirement, which allows the dismissal of workers who reach the legal retirement age when they have the right to collect 100% of the pension, if so provided for in an agreement. collective.

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This orientation of the reform does not like in the CEOE. The management understands that these changes can make it difficult to renew templates. And, in addition, they add that among older workers, the labor cost is not only higher because they receive higher salaries, but also because they also tend to have fewer sick leave than the rest of the workforce.

The Ministry of Social Security has understood this last argument and has made a proposal in the negotiations that it has kept open with social agents for months for the pension reform. The offer basically consists of alleviating the contributions that companies pay for workers aged 62 or over when they are off duty. For that, it has proposed a 75% reduction in the contribution for common contingencies during these periods to all companies, sources of social dialogue point out. The initial offer was to do it from 63 years of age, but in the last board meeting held so far, the department headed by José Luis Escrivá improved the proposal until he was 62 years old.

The approach, however, is an offer that has not yet been accepted by the other parties to the negotiation and, therefore, could change a lot in future meetings.

The conversations between the social agents and the Social Security already go on for several months. According to several public statements made by Escrivá, they should be close to finishing, as he has indicated that his intention would be to soon approve this first package of pension reforms. However, several sources of social dialogue believe that there must still be several movements by the Executive to close the pact.

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Already in previous weeks, the Executive has carried out other assignments, such as the resignation to demand adjustments from pensioners if prices fell. Finally, the update will be following the past CPI, but if this is negative, pensions will not rise less in the following years to compensate for it.

Escrivá also announced this Friday that he is willing to give up a change in partial retirement. This was pointed out in an interview on TVE. This is an early retirement modality that allows a worker who has a long contribution career to partially retire — so he still has to work part of the day — if the company hires a young person in his place. In the initial Social Security plans, their modification was foreseen, as the minister explained weeks ago in Congress. However, Escrivá has reaffirmed that there will be a reform of forced retirement and early retirement, in which it tends to place more emphasis.

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