The revaluation of pensions according to the Consumer Price Index (CPI), as established by the last law approved by Escrivá at the end of the year, could entail a cost of 12,300 million euros in 2023, with inflation estimates of 7%. , according to data from the WTW Pension Observatory, published this Tuesday. In other words, each extra point of inflation adds some 1,750 million extra to pension spending.
WTW also warns that it is not clear that this revaluation of pensions will be accompanied by an increase in the collection of contributions, since agreeing on a 7% salary increase “does not seem like a very realistic situation today.”
The manager of the Retirement area at WTW Spain, Rafael Villanueva, explained that for each revaluation point, pension spending will increase by around 1,530 million euros. “It must be taken into account that, in addition, these amounts are consolidated and must continue to be paid for life,” he warned.
WTW clarifies that the cost of the revaluation for 2023 will be 10,832 million euros, based on the pension payroll managed by the National Institute of Social Security, with a supplement to minimums, a supplement to reduce the gender gap and other supplements .
Therefore, they exclude management expenses, since they are not part of the payroll, non-contributory pensions, managed by the Imserso, and Passive Class pensions.
For the updating of the pensions of the passive classes, an increase of 1,307 million euros is estimated, while in the case of non-contributory pensions, the cost amounts to 196 million euros. In total, the revaluation of pensions with inflation will be, according to WTW estimates, 12,334 million euros next year.
The WTW Observatory has also analyzed the cost measured in terms of Actuarial Present Value (VAA), which amounts to more than 165,000 million euros, with an estimated CPI of 7.2%. The calculation leaves out the Minimum Vital Income (IMV), Temporary Disability or family benefits. It also excludes the benefits of the Public State Employment Service (SEPE).
Contributory deficit
WTW observes in its report “some items with amounts that (…) seem unbalanced”, and refers, specifically, to the increase in contributions for the unemployed or to the item of cessation quotas for their beneficiaries.
“We will have to analyze everything exhaustively in the coming weeks,” they point out and specify that the Social Security contribution deficit has been corrected as the worst quarters of the pandemic disappeared from the calculation. The deficit due to non-financial operations also improves, as a consequence of the greater transfers from the State in response to the first recommendation of the Pact of Toledo.
“The objective was that in 2023 all the deficit due to non-financial operations would disappear, so in 2022 we will see how State transfers increase further to comply with the recommendations of the Toledo Pact,” Villanueva foresees. However, the expert considers that the calculation of the contributory deficit is “more necessary than ever” to know what the real situation of the system is in its contributory part.
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