In what appears to be a world wide trend, the Spanish state pension system looks set go into the red in 2022 unless reforms are undertaken now, according to a study released last Wednesday. The report — carried out for the Spanish association of insurers (UNESPA) and presented by former IMF chief Rodrigo Rato—particularly highlights the need to extend the pensionable age to beyond 65.

It also calls for state incentives for early retirement to be removed, and for compulsory retirement to be struck down. And, for the development of private pension schemes to supplement the state pension. “We are convinced that the key to the sustainability of the system is extending the working life,” Rato said.  The average age at which Spanish workers retire is currently 63.

“The Spanish social welfare system is worthwhile and no effort should be spared to ensure it continues to be,” Rato added. “Reforms need to be put in motion with some urgency.” The former managing director of the International Monetary Fund and economy minister in the government of Prime Minister José María Aznar said changes to a pension system normally take 15 to 20 years to make themselves felt.

The study also called for changes to the way pensions are calculated. Workers currently have to make social security contributions for a minimum of 15 years to be entitled to a pension.

via PENSIONS TO RUN OUT IN SPAIN BY 2022 | National | Leader Newspaper – News, Sport, Advertising, Property, Classifieds – Costa Blanca, Costa del Sol, Costa Calida, Costa de Almeria, Spain.