The pension would be calculated taking into account all the intricacies of a career: part-time jobs, leaves of absence or reductions in working hours, which are much more common among female workers.
Last week, the media reported that the PP had proposed to the Toledo Pact Commission to extend the pension calculation period to the entire working life on a voluntary basis and that workers can exclude a certain number of years, not specified at the moment, in which they have lower contribution bases. The measure was announced yesterday by the Minister of Employment and Social Security, Fátima Báñez, in an interview with TVE.
The proposal, as initially explained, would especially benefit those workers who paid more at the beginning or middle of their working life, but not at the end of it. With the "voluntary" measure, for the purposes of calculating the pension, the entire working life would be taken into account and not only the last years as is currently the case, which would improve the amount of the benefit.
The Ministry mentioned some of the groups in this group that would benefit the most, such as workers who were laid off in the last years of their professional career and those who were forced to work as self-employed workers during the crisis due to lack of employment.
The dark side of the proposal
But it seems that with each passing day, the dark side is beginning to emerge, and if it is approved without further ado, many women could be harmed.
What exactly does the measure entail? What we know so far is a general line, but there are still details missing that would allow us to know its exact scope. In principle, it would mean that a person's pension would be calculated taking into account the salaries and contributions of their entire working life. Although Báñez said that it would be voluntary (that is, each person would decide whether their pension is calculated based on the last 21 years – a period that will increase as the pension reform is applied – or on their entire working life), sources from the Toledo Pact assured that the PP's proposal simply opted to extend the calculation to everyone's entire career.
This change is justified by the need to help people who, in the last years of their working life, have become unemployed, a circumstance that will harm their pension. But there is a catch. By taking into account the entire working life, the pension would be calculated taking as a reference all the twists and turns that occur in a career: periods of unemployment, low salaries, part-time jobs, leaves of absence... Women, with careers with more interruptions due to leaves of absence for care and higher precariousness, could be harmed by this method of calculation.
And when the years for calculating the pension are extended, there is a greater likelihood that gaps in contributions will be included in the calculation due to periods of inactivity due to care or lack of insertion in the labour market. This is a much more frequent circumstance among female workers, since, for example, 90% of the people who are outside the labour market to devote themselves to care are women. This, in turn, tends to have a negative impact on the possibilities of reintegrating into employment in good conditions. Although not all leaves of absence or reductions have the same impact on contributions, in many cases they do mean a reduction for those who take them.
Currently, contribution gaps are 'filled' with an amount similar to the base of the minimum interprofessional wage: the last 24 months of inactivity are computed with a contribution similar to that of the SMI, and the rest of the gap, if there is one, is computed as half of the SMI.
An example. Maria is retiring this year at 65 and her pension will take into account the last 21 years of contributions, that is, her career since she was 44. In her case, this is a period in which, although not with the best salary of her career, she has worked continuously. If her pension were calculated over her entire working life, it would take into account both the four years of leave she took to care for her children and the other six years in which she took a reduction in working hours. Part of this period will be paid as her previous salary, but another part will not, which will affect her pension.
More part-time work and reduced working hours
The deputy general secretary of UGT, Cristina Antoñanzas, insists on the particularly negative impact that this measure would have on women. "Women are the ones who take leave of absence the most and have a higher incidence of part-time work. The more you extend the calculation to the entire working life, the more likely it is that these periods will occur," she says.
Antoñanzas talks about introducing coefficients to reduce inequality in pension payments, although taking into account that they should "correct but not reproduce" gender roles. That is, establishing a coefficient to reduce the impact of leaves of absence in the calculation of the pension does not serve to maintain inequality in care over time: men work, women take leave.
The professor of Applied Economics at the Autonomous University of Madrid, Santos Ruesga, stresses that extending the calculation to the entire working life "harms everyone", but admits that due to the greater incidence of reductions in working hours or part-time work in women, it would have a greater effect on their pensions. This would not be the case if, as the minister suggested but has not been specified, the years taken into account to calculate the pension could be chosen. In that case, each person could choose what best suited them. Even so, and due to the "shorter contribution careers" of women, it would be more difficult for female workers to ensure that their more than 20 years of contributions required to calculate their pension did not include gaps or part-time work, reduced working hours or precarious employment.
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