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The Spanish government is strengthening the pension fund for the first time in 13 years



After the financial crisis a decade ago, the government withdrew all funds from the fund

The Spanish government has transferred 2.9 billion euros to the pension fund, Budget Minister Maria Jesus Montero announced. It is the first state injection into the pension fund in 13 years.

In Spain, the Reserve Pension Fund is designed to help the country finance pensions in times of poor public finances. There were 2.2 billion euros in the pension fund at the end of last year.

The pension fund still contained 66 billion euros in 2011, but the Spanish government withdrew practically all funds from the fund after the financial crisis, during which millions of Spaniards lost their jobs.

In 2021, parliament approved a reform of the pension system that includes a 0.6% addition to social contributions – called the “intergenerational capital mechanism” – to finance the fund.

Will the government align pensions with rising prices?

A government source told Reuters that the government could implement the pension hike forecast this year in line with the rise in consumer prices, as the country has good employment data this year and has crossed the 20 million job mark. 47.5 million people live in Spain.

Minister Montero estimates that the prices of consumer goods will rise by 8.5 percent, while the total spending of funds for retirees is expected to increase by 11.5 percent due to new retirements.

Source: Rtvslo

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