The pension payroll registered a new high in October, rising to 1,259.6 million euros for the payment of 10.2 million benefits to almost 9.3 million beneficiaries (around one million of them collect two pensions). The monthly cost of paying pensions increased by 6.8%the highest year-on-year percentage recorded so far this year. The strong increase that the new retirement pensions of the general regime for employees are registering, together with the impact of the revaluation of these amounts as well as the CPI, are among the main causes of the increase in this item of expense.
Specifically, the new retirement benefits of employees registered in September (the last month for which this data is available) amounted to an average amount of 1,743.9 euros per month (in 14 payments), after experiencing an strong increase of 11% compared to a year before, according to the figures provided this Friday by the Ministry of Inclusion, Social Security and Migration.
This increase is double the increase in the system’s average pension (which includes retirement, permanent disability, widowhood, orphanhood and family benefits), which stands at 1,259.6 euros, after increasing by 5% on average. in interannual terms. The decisions to delay retirement that some workers are making—either due to fewer early withdrawals or the increase in those delayed beyond the legal age—is one of the causes behind this sharp increase in new registrations of workers. salaried.
So, early retirements, which mostly have reducing coefficients that cut these amounts and, therefore, reduce the new benefits, have less and less weight in the total of the new additions. Specifically, early retirement now represents 28.9% of total new retirements, compared to 34% in 2023 or the 44.5% it represented in 2016.
What’s more, unlike what happened until last year, both forced advances (which come from layoffs) and voluntary advances have fallen substantially. Thus, until August, the former – which allow retirement to be advanced up to four years – decreased by 45% compared to 2023 and the latter – in which retirement is advanced by up to two years – fell by 40%.
While delayed retirement registrations have increased their weight to 9.6% of total new retirement pensions, compared to 8.1% the previous year, and the little more than 4% they represented before the pandemic. All in all, the average age of access to retirement benefits is currently 65.2 years (and the legal retirement age is 66 years and six months this year).
Along with the delay in retirements, and the automatic revaluation by law of pensions according to the CPI, Social Security also points to other factors that are increasing the amounts of the pensions of the new retirement registrations. Firstly, they cite the improvement in the labor market, with more stable jobs, as well as the recent increases in the SMI, which are improving the contribution careers of those who retire.
Secondly, they point to an improvement in the coverage of the integration of contribution gaps, which also generates better benefits to be eliminated, in the calculation of the final amount of the pension, more periods in which the worker has not contributed. Thirdly, and also among the measures that have been developed in recent years to protect pensioners and maintain their purchasing power, is the increase in the amount of the supplement to reduce the gender gap considerably (in the agreement of 2023 it was agreed to increase it by 10% between 2024 and 2025).
Aging
In addition to the list of pensions from the Social Security system, the ministry has also provided this Friday the amount of the payment of the benefits of the passive classes – those collected by civil and military officials of the General Administration of the State , the Administration of Justice and the Cortes Generales among other public organizations—which in September (latest data available) totaled 1,605.2 million euros, 7.4% more than in the same month of the previous year.
In this case, the number of pensions paid was 713,471, 2.1% more. Thus, the rate of increase in pensions for passive classes is already higher than that of the general system (whose number of benefits increases by 1.5% annually) due to the greater aging of public sector workforces.
