The Toledo Pact starts again practically a year after it disintegrated. “Is dead”. With these words the then deputy of PdeCAT Carles Campuzano He certified the impossibility of reaching an agreement precisely when he was closest and after two and a half years of work. Campuzano, one of the heavyweights in this commission, will not be once he has left the first political line, nor will other veterans like Celia Villalobos and Gerardo Camps –Of the PP–, nor the former Citizen Sergio del Campo. Nor will they attend to reflect on how to reform a pension system that is in red numbers today Minister of Labor, Yolanda Díaz, nor his classmate Aina Vidal, precisely to whom was blamed for the pact jumping into the air. María del Carmen Pita will now be the spokeswoman for Podemos, a party that may be key to achieving consensus, as it was the one who opposed the previous stage and who presented a year ago particular amendments to 20 of the 21 recommendations.
But to the current commission is added Vox, something that can generate more division in view of the fact that they advocate a mixed system, and many new faces, including Ignacio Echániz at the head of the Popular Group and the Canary Islands Ana Oramas as voice of the Mixed Group. Its president will foreseeably be the previous Minister of Labor, Magdalena Valerio, who returns years later to be part of this team in which the socialist Mercè Perea, the deputy of the PNV Iñigo Barandiaran or that of Esquerra, Jordi Salvador remain.
On the table of the first meeting will be half a hundred pages that had already been written and practically agreed with the 21 recommendations to reformulate the system. “This will be the starting point”, Perea and Barandiaran argue that they refuse to start from scratch and waste the “good work that had been done, the product of much goodwill and many concessions on the part of all,” according to the nationalist deputy, although he admits that “we must enrich it because there are new parties ».
Although Vox already marked position this past week in Congress with its vote against the pension increase of 0.9%Perea is “optimistic” and thinks that there is “willingness” to reach a consensus in the “great majority” of groups, because “it is a topic that hurts us all.” Your bet is to start solving issues and not wait until you have all the recommendations closed, since the new Toledo Pact has to be “more agile and effective”, so open the door to not wait until you have all the recommendations closed and solve the sustainability part of the system in the short term.
Not in vain this time the future of this commission and its credibility are at stake. This is recognized by Barandiaran himself, aware that there are some voices that criticize his inability to reach an agreement. This is what IESE professor Javier Díaz Giménez considers, who argues that “the Toledo Pact has to be dissolved because it has already demonstrated its inoperativity.”
Among the consensus that had practically closed a year ago are such thorny issues as the new revaluation of pensions, the separation of sources, the need for to enlarge the actual retirement age, the implementation of measures to reduce the gap gender and even a comprehensive pension reform of widowhood and orphanhood. The creation or not of a new sustainability factor that includes life expectancy, the legal retirement age and the definition of what a decent pension can be the big pitfalls.
Revaluation with the CPI
The first major agreement announced by the Toledo Pact – although it was not signed by Esquerra – is the need for pensions to be revalued every year «Based on the real CPI», which would put an end to the Revaluation Index (IRP) that brought the reform of the PP Government and that led pensioners to minimum increases of 0.25% while the system has a deficit. “The Commission notes that the current IRP does not have sufficient political and social consensus,” explains the draft of the recommendation 2, which was agreed at the end of 2018. Another issue will be to establish what the real inflation is each year, since it can be taken as reference for November, December or the annual average, as the Executive has done the last two years.
The previous Commission has already established a series of recipes with which they intended to end in 2025 with the deficit that the Social Security carries since 2011 and End the state lending policy to the system. Thus, they established that social contributions should be used “exclusively” to pay contributory pensions and the rest of the benefits are paid “through contributions from the State”. Thus, he considers that they have to be in charge of the Budgets and not from the Social Security accounts the active employment policies (such as bonuses to certain groups or reductions such as the flat rate), subsidies, the benefits of maternity and fatherhood, the expenses of personal, aid to specific sectors to be able to pre-retire and to certain regimes such as agrarian or home, among others. It is, therefore, one more step in the process of separation of sources that was launched in 1995 and an allegation to use more taxes to ensure the sustainability of the system and the sufficiency of benefits.
New quote for freelancers
The Commission considers it “necessary” to reduce contribution schemes to two, so that there are one-off workers and, on the other, self-employed workers. Along these lines, it is urgent to implement a new system to that the self-employed quote for their real income and, at the same time, that the social protection between both regimes is “comparable”.
A floor for the Reserve Fund
The so-called ‘pension piggy bank’ is practically empty: it has passed from having 66.8 billion in 2011 to just 2.150, which is a matter of concern for the Toledo Pact. Therefore, recommendation 3 proposes to shield this Reserve Fund that was created to deal with the retirement of the baby boom with a minimum endowment equal to 7% of annual expenditure in contributory pensions, which is currently equivalent to setting land in the area of 10,000 million.