The lost generation

The government announced its pension reform. This election promise should give pensioners an answer to a real problem: pensions are very low compared to the standard of living of their working life. And the reasons are multiple: from the point of view of the system, there is a soft but systematic pressure derived from a greater longevity. Regardless of the age of retirement, longer life expectancy translates into more years than funding and, therefore, lower pensions.

However, from the point of view of the future of the system, the problem lies in pension gaps. But it is not recent shortcomings. Examining retirement savings, it's like studying the fossil of a safe: you can appreciate the effects of past climate changes. Similarly, retirement savings is a narrative of the history of work and financial history.

A woman who retired at the legal age was 22 years old today in 1980 and a man 27. Between 1980 and 1990 the average unemployment rate was about 12 %, mbadive underemployment and informality and the duration of a very long unemployment. On average during this decade, a woman of this age cited 20% of the time and one man, 31%. The reason was the unemployment caused by the mbadive reallocation of resources resulting from the liberalization of trade and the 1982-1983 crisis, in which GDP had fallen by 17%.
Unintentional unemployment caused expensive differences in retirement savings, because then returns were very high. According to a conservative estimate of the impact on retirement savings, this could mean a reduced pension of 30% for unrealized contributions and the effect of compound interest.

There are 2,449,000 people who started their working lives in the 80s and today are between 55 and 65 years old. The stability of the pension system requires a credible response.

To our knowledge, government reform does not do this. It is proposed to strengthen the pillar of solidarity in the context of some uncertain future "gaps" of the state, but these depend on cyclical emergencies. The 2008 reform would bring the pillar to 1.1% of GDP. This has never happened. This generation will benefit from a solidarity insurance financed at 0.2%, but it will be in 30 years and only if it is in extreme conditions of abandonment. They may also postpone their retirement, but even if they are employed, it will be difficult for women to reach the age of 65 and for the 70-year-old men to make up for the loss of income suffered by their youth. One is to inject mbadive resources into the Pilar Solidario (at least double the amount committed), but the Treasury is not able to do it. The other is to establish a universal insurance for the fourth age that the reform does not envisage.