Fedea proposes that the general public pension be 100% appropriate with employment however with out severance pay | EUROtoday

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He suppose tank Faith believes that the one approach that Spain has to face growing old of its inhabitants is making appropriate 100% entry to public pension -when you have got contributed sufficient and attain retirement age- with having a employment and cost a wageas occurs in different nations.

According to a examine introduced this Monday, this formulation that’s carried out in most European nations helps many individuals who wish to proceed working after turning 65 to proceed doing so and, on this approach, proceed contributing to the nation with their taxes, proceed consuming and producing wealth.

“The only way to confront the aging of the population is to facilitate that workers can be productive beyond the legal retirement age. We propose turning around labor and pension legislation as a sock to stop wasting senior talent who wants to continue working”, he claimed Sergi Jimnez-Martn, professor at Pompeu Fabra University, co-author of the examine with Jos Ignacio Conde-Ruizprofessor of Fundamentals of Economic Analysis on the Complutense University of Madrid.

To do that, they suggest, the logical factor can be to create a brand new employment contract, that they might signal after reaching that age in the event that they determine to proceed working, during which severance pay is ready to zero gathered as much as that time. In this fashion, firms' concern of extending the working life of those staff past the retirement age is eradicated, since they might not need to face very excessive compensation in the event that they needed to fireplace them.

“A new contract compatible with the pension would have to be created so that they can continue working in the same or another company, without limits or restrictions. As the contract is for people who have a insured pension, it should have a special extinction regime without prior compensation costswith a contractual notice period in case of withdrawal,” they level out.

According to what they denounce, in Spain the overall state of affairs is that of incompatibility, so that almost all of people that retire go straight from working 40 hours per week to working zero. What they suggest passes by means of energy steadily scale back the working day and that an individual who reaches retirement can determine to proceed working a smaller variety of hours per week (for instance, three mornings).

A mechanism in order that these folks can both proceed quoting completely for hours who work (now they’re penalized and might solely contribute a diminished proportion), so their pension should recalculate upwards after they cease being energetic completely, or don’t contribute to Social Security and pay their full wage, so their pension would be the one they already know. They additionally ask that there be no penalty:

Today, individuals who attain retirement age with the minimal years of contributions and determine to proceed working are obliged to work yet one more yr till they’ll take energetic retirement (for instance, till they’re allowed to begin working 50% of the time and accumulate 50% of the pension) or to cease working for a yr and wait. Fedea considers that this yr during which they’re compelled to be working – or ready, inactive – ought to disappear.

The group affirms that its proposal is supported by the report Space 2050 who made the Government Foresight Office, during which it was acknowledged that “the response to the challenge of aging involves using part of the gains in longevity (in good health) in the coming decades to produce and generate wealth, enabling the voluntary extension of the working period for those who wish to do so.” , which, as has been proven in different nations, will be many.

In addition to facilitating the extension of working life for individuals who wish to proceed working, consultants imagine that the permitted disincentives for early retirement, since they imagine that in some instances staff might wish to depart the labor market earlier attributable to their very own well being circumstances or the hardship that their work entails.

“Restricting early retirement does not affect pension spending (as AIReF demonstrated) and can ruin worker satisfaction or even affect their mortality in the case of difficult sectors,” Jimnez-Martín careworn.