Changes Are Needed In The Design Of Active Retirement To Encourage It

The Foundation for Applied Economics Studies (Fedea) advocates improving the design of active retirement and proposes to analyze the perception of minimum pensions under active retirement, which is exempted from contributing for common contingencies in the ages prior to legal age and consider that the amount of the compatible pension is greater or less than the current 50%.

It is not the first time that the foundation has asked to reform the incentives to delay leaving employment . He did so in March and repeats it in the study published this Monday and signed by the researchers Alfonso R. Sánchez Martín and Sergi Jiménez Martín, remember that although Spain has had active retirement since 2013, which makes it possible to reconcile the collection of 50% of The pension in the case of employees while still working, there are two “important” problems: “very restrictive” access conditions and “not always generate the right incentives” for companies and workers to take advantage of it.

These drawbacks, according to Fedea, indicate that it is not expected to be used mainly in the future. If it is sought to encourage this modality, “it will be necessary to significantly improve its design, optimizing it in aspects such as the contributory details during the compatibility phase, the percentage of the pension to be received, the degree of updating of the final pension, etc.”, indicate from the foundation.

Fedea, who analyzes the effects of “relaxing” the access conditions and recalculating the final amount of the pension taking into account the compatibility period and concludes, considers that it will be necessary to further refine the design: “reflect the interests and decisions of the companies is clearly the most necessary extension “of active retirement and with a view to future jobs,” the most immediate “is to explore” new institutional reforms . ”

In addition, the foundation also advocates other changes, such as allowing the receipt of minimum pensions under active retirement, exploring environments in which contributions are exempted for common contingencies in the ages prior to legal age, and considering income ranges in which the amount of the pension during the compatibility phase is higher (low wages) or lower (high wages) than the current 50%.

In the authors’ opinion, “all these changes fall into a more general category: the need to optimize the design of the compatibility mechanism with the objective that Social Security can receive a part of the surplus produced by each worker who participates in the program “.

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