Business Brief
Why does the British pensions system not function in Spain?
Dec 5, 2017 - 7:25 PM
Spain Business Brief - Tuesday December 5, 2017
Why does the British pensions system not function in Spain?
Dec 5, 2017 - 7:25 PM
Dark clouds on the horizon in the Spanish pensions system which is failing to cope with the changing demographics.
The OECD – the 35 most developed countries in the world, calculated in their latest report, that in 2050 Spain will have around eight people more aged over 64 for every ten in working age (in 1980 it was only two) indicating the risks facing Social Security, which is sustained by the taxpayers.
Despite the signals of a possible bankruptcy of the Spanish public pension system, private pension plans should be provided by the employers and they should share payments with the employees. These financial devices increased until the end of 2007 and reached 30.4 billion €. Last year, total patrimony fell by 4 billion € and since 2014 is has been stagnant at 35.5 million €
The last decisions by the Government last week decided to regulate from 1.5% to 1.25% the average commissions paid for investing in private pension plans – ‘this is going in the right direction’ assured studies director of Inverco, José Luis Manrique.
Surrounding the profitability of the pension funds is where savings gather and the costs of contraction, otherwise it would affect all individual pension plans, whose costs are much higher than imposed on the company.
Although being correct, the parch approved by the Cabinet ‘is not sufficient’ in the words of Manrique. Youngsters are not interested in investing in private pensions plans, occupied by the typical things of their age.
An official stimulus would reside in the adoption of a complementary system of almost obligatory payments for company pension plans. ‘Firstly, for the worker the company must establish a pensions plan, but the employee would have the choice to reject this’ he resumed.
The British model, which follows payments by both employer and employees to generate a personal fund which can be protected over the long term. ‘This situation is the most adequate and I am sure that its migration to Spain would result in a greater stability and ease economic growth’ said president of Novaster consultancy Diego Valero. The obligation imposed on the largest unions, UGT and CCOO and the patronal CEOE, should support this instrument as a formula for deferred payment to fund public pensions, but again voluntary.
Santander is limiting the remuneration of their iconic ‘Account 1-2-3’ reducing maximum investment from 15,000€ to 10,000€ after the prolonged low interest rates.
Santander is to sack 3% of the workforce after absorbing Banco Popular and to fill the black hole. The unions have closed the agreement for the ERE after reducing the number of redundancies from 1,585 to 1,100 – a resolution which admits losses this year of more than 12 billion €, assumed by Banco Santander.
96% of the new unemployed during November were women – of the 7,255 people joining the dole queue, 6,969 were women
The IBEX 35 closed up 0.03% to 10,211.30
The FTSE 100 closed down 0.16% to 7,327.50
Euro / Dollar closed down 0.53% to 1.181
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The OECD – the 35 most developed countries in the world, calculated in their latest report, that in 2050 Spain will have around eight people more aged over 64 for every ten in working age (in 1980 it was only two) indicating the risks facing Social Security, which is sustained by the taxpayers.
Despite the signals of a possible bankruptcy of the Spanish public pension system, private pension plans should be provided by the employers and they should share payments with the employees. These financial devices increased until the end of 2007 and reached 30.4 billion €. Last year, total patrimony fell by 4 billion € and since 2014 is has been stagnant at 35.5 million €
The last decisions by the Government last week decided to regulate from 1.5% to 1.25% the average commissions paid for investing in private pension plans – ‘this is going in the right direction’ assured studies director of Inverco, José Luis Manrique.
Surrounding the profitability of the pension funds is where savings gather and the costs of contraction, otherwise it would affect all individual pension plans, whose costs are much higher than imposed on the company.
Although being correct, the parch approved by the Cabinet ‘is not sufficient’ in the words of Manrique. Youngsters are not interested in investing in private pensions plans, occupied by the typical things of their age.
An official stimulus would reside in the adoption of a complementary system of almost obligatory payments for company pension plans. ‘Firstly, for the worker the company must establish a pensions plan, but the employee would have the choice to reject this’ he resumed.
The British model, which follows payments by both employer and employees to generate a personal fund which can be protected over the long term. ‘This situation is the most adequate and I am sure that its migration to Spain would result in a greater stability and ease economic growth’ said president of Novaster consultancy Diego Valero. The obligation imposed on the largest unions, UGT and CCOO and the patronal CEOE, should support this instrument as a formula for deferred payment to fund public pensions, but again voluntary.
Santander is limiting the remuneration of their iconic ‘Account 1-2-3’ reducing maximum investment from 15,000€ to 10,000€ after the prolonged low interest rates.
Santander is to sack 3% of the workforce after absorbing Banco Popular and to fill the black hole. The unions have closed the agreement for the ERE after reducing the number of redundancies from 1,585 to 1,100 – a resolution which admits losses this year of more than 12 billion €, assumed by Banco Santander.
96% of the new unemployed during November were women – of the 7,255 people joining the dole queue, 6,969 were women
The IBEX 35 closed up 0.03% to 10,211.30
The FTSE 100 closed down 0.16% to 7,327.50
Euro / Dollar closed down 0.53% to 1.181
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