The equation of our pension system is so simple and devastating that few discuss the reality that our country faces a growing tension where there are more and more retirees, greater life expectancy and less quotes by pensioner, which means that, despite the numerous changes suffered, the result is a model that, without deep structural reforms, is unsustainable and has been deficient for years. In this context, formulas such as active retirement are only necessary patches to gain time. This model is a miracle worthy of the presenter that consists of convincing people to collect half of their pension while working full -time is an opportunity, all wrapped in a friendly speech about healthy aging, but it is a necessary patch to gain time.
For public coffers, it is a round business, since the active retiree continues to pay social security contributions, IRPF tax for the salary and also for the pension part it charges, and in the meantime the State only pays 50% of the pension, which generates an extra flow of income and an immediate spending savings, that is, the quadrature of the budget circle.
But if it is analyzed from the worker’s side, active retirement does not improve the future pension if extra contributions do not generate additional rights and, in addition, by adding salary and pension, the retiree usually climbs in the progressive table of the personal income tax, contributing even more to the common box. Work more, pay more and charge less, an irony that only an distress system can present as “incentive” that is useful for quading public accounts, but unattractive for those who consider their retirement.
In short, active retirement fulfills an immediate function for the financial balance of the State, but does not solve the central question, how to extend working life is really attractive? While the answer is “work more, pay more and charge less,” we call it as we call it, it will continue to smell more like a structural solution.
Doctor in Economics and Vice Dean of EAE Business School