Spain: To Address Ageing Labor Force, Government Proposes Raising Retirement Age

The Spanish government has proposed a number of changes to address changing demographics in the labor force. The main provisions of the proposals include:

• an increase in the retirement age from 65 to 67, with the transition process for this shift beginning in 2013


• an increase in the earliest retirement age, which varies by profession and is currently as low as 52 in the mining industry


• an extension of the contribution period to calculate retirement benefits, which will have the likely effect of gradually reducing the amount of benefits a given worker could expect to receive


• labor law changes that would provide more flexibility in the employment relationship toward the end of a worker’s career and reduce the frequency of situations in which workers are dismissed near the end of their careers and lose their pensions


• review of disability pension procedures, as well as measures to encourage workers with disabilities to rejoin the workforce


• reform of spouses’ and orphans’ pensions, possibly reducing them, possibly introducing a needs test

These proposed measures are not to come into effect until after the elections in 2012. There is strong political opposition from unions to some of these proposals.

“Government Proposes Changes to Retirement Age, Pension Contributions,” March 2010;
http://www.towerswatson.com/research/1483