Pension reform refers to changes made to a country’s pension system aimed at improving its sustainability, efficiency, and fairness. This can involve adjustments to the structure, funding, benefits, eligibility criteria, or management of pension programs. Pension reforms are often undertaken in response to demographic shifts, such as an aging population or declining birth rates, which can place financial strain on pension systems.
The goals of pension reform may include ensuring adequate retirement income for individuals, reducing public expenditure on pensions, increasing private sector participation, and encouraging personal savings for retirement. Reform measures can vary widely from raising the retirement age, modifying benefit formulas, introducing or expanding personal retirement accounts, to shifting from defined benefit plans to defined contribution plans.
In essence, pension reform seeks to create a more sustainable and effective pension system that can meet the needs of current and future retirees while balancing fiscal responsibility for governments and employers.
Spain's pension reform introduces a 2.8% increase for most contributive pensions and a 9% increase for non-contributive benefits, retroactive from January 1. The reform includes a "minimum supplement" for specific…