The Minister of Inclusion and Social Security, José Luis Escrivá, did not like the reflections that the Bank of Spain has made in its Annual Report on the pension reform, in which he shows his skepticism about the operation of the Intergenerational Equity Mechanism (MEI) -one of the star measures of the reform- to guarantee the sustainability of the public pension system in the medium and long term, questions the revaluation of pensions with the CPI and warns that the deficit and the debt will skyrocket to levels never seen before if new measures are not adopted to contain system spending.
For Escrivá, the analysis of the institution governed by Pablo Hernández de Cos is based on outdated information, suffers from a lack of technical consistency and does not contribute a single new element to the debate on pensions.
«The bank has not made any new analysis on the measures that have already been adopted or on those that are going to be adopted and they are formulated in a generic way and the quantitative references refer to a report from when I was still at Airef. Those are the wickers of the study”, Escrivá stressed this Thursday at the press conference after the fortnightly presentation of the data on Social Security affiliation.
“There is a lack of sophistication in the Bank of Spain’s analysis of pensions,” continued the minister, who has also declared himself surprised by the defense that the institution makes of the reinstatement of a mechanism similar to the already repealed Factor of Sustainability of the 2013 reform “seeing the overwhelming failure of automatic rules in both fiscal and monetary policy.”
The Sustainability Factor was the long-term adjustment mechanism of the public pension system established in the 2013 reform, whose main objective was to guarantee that the initial benefit of pensioners responded to the life expectancy in force at each moment to guarantee a certain intergenerational balance, so that the non-adjustment of the legal retirement age to life expectancy would not translate into a higher relative retirement benefit.
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