The pension system gets a bare pass in a new exam by the Fiscal Authority

MadridThe current pension system, a result of Pedro Sánchez's government's last major reform, gets a barely passing grade in a new examination by the Independent Fiscal Responsibility Authority (Airef). The body, now headed by Inés Olóndriz, confirmed this Friday morning that the system complies with the pension spending rule, and therefore, the Spanish government will not be forced to approve additional measures to adjust spending and income. However, the Fiscal Authority is once again casting doubt on the system's sustainability and, in fact, questions it.

In this way, Airef reaffirms the conclusion it reached in March of last year, when pensions passed their first major examination, as stipulated by law. In fact, the examination passed this Friday is a study on the spending rule and represents a continuation of last year's major examination. "The study is carried out in compliance with the additional mandate requested from Airef to update the analysis already done in 2025, incorporating the most recent macroeconomic data and available information on income," the body recalls in a statement.

The Fiscal Authority "notes" that pension spending will stand at an average of 13% of GDP in the period 2022-2050, the time of greatest strain on the system due to the retirement of the baby boom generation, the largest one. This threshold is below that set by current regulations (13.3% of GDP). It even improves the average cost during these years compared to the 2025 conclusions because it has detected a "greater impact from income measures to strengthen the system." These revenues are now revised upwards and stand at an average of 1.6% of GDP between 2022 and 2050.

More public debt

However, "the formal compliance with the spending rule does not mean that tensions over the sustainability of public accounts will disappear. In a scenario with constant policies [...] debt would begin a long-term upward trend driven by the aging process of the population, which worsens the vulnerability of public finances. After updating demographic, macroeconomic and fiscal forecasts, this scenario places public debt at 123% of GDP in 2050," indicates the entity.

This Thursday, the Spanish government anticipated its results by publishing a report in which it maintains that the sustainability of pensions is "assured" and sources from the Ministry of Social Security reaffirmed this on Friday.

If the system did not comply with the pension spending rule, the central executive would be forced to take adjustment measures. For example, increasing revenue through an increase in workers' social contributions. Or applying measures through spending, that is, on the amount of benefits received by those people who collect some type of pension. Here, retirement pensions, which are the bulk of the system, take center stage. In fact, these are now linked to inflation, something that Brussels, for example, has always looked at askance.

It questions the calculation again

However, once again, Airef questions the way the spending rule is calculated. Beyond reiterating a "limited" calculation, it assures that the current rule only observes the cost of pensions and, therefore, offers a "partial view". In any case, the rule was incorporated into the last major reform that was approved in the Congress of Deputies and later endorsed by Brussels.