The ‘hack’ to early retirees with 40 years of contributions

Emilio Rodríguez, based in Madrid, has been working in the construction sector for more than four decades. With 62 years and 46 years of contributions to Social Security, fatigue takes its toll on his body and he believes that the time has come to retire and obtain the well-deserved pension that, since he was 16 years old, he has earned through hard work. But, with current regulations, that would mean see cut the amount that would receive up to 14%, not only the two years left to reach 64 years -the legal retirement age based on this contribution period-, but for life.

“If it is already unfair that they penalize us with more than 40 years of contributions, that that ‘ax’ is maintained in a perpetual way is directly inhuman”Regrets Rodríguez, who opens the door for reducing coefficients to be applied during the years that go from early retirement to legal age and for them to retire once those years have elapsed. “It is fair that they pay us 100% of what corresponds to us,” he explains to, “everything else is stealing from a lifetime of work.”

This is not an isolated case. There are more than half a million workers in this situation in Spain, according to data from the Association for Early Retirement without Penalty (Asjubi40), which has been fighting for years to have this right recognized. People who, if they want to access early retirement, either voluntarily or forced -having exhausted unemployment benefit, having suffered an ERE, an unfair dismissal and end up expelled from the labor market due to their age-, will have their pension reduced from importantly, having even contributed 50 years. “The sacrifice has been pharaonic and it seems that it has not been of any use,” adds Rodríguez.

Up to 40,000 euros of losses

According to Asjubi’s calculations40, taking into account that one of these people can live to be 83 years old – according to life expectancy – and having advanced the pension collection three or four years, the fact of taking advantage of an early retirement in these conditions would lead him to lose between 35,000 and 40,000 euros. In addition to this “life sentence” to which they are subjected, as the collective calls it, they denounce the comparative grievance with respect to those workers who have fewer years of contributions and receive the full pension for retirement when it is established.

“This situation is not fair when we have contributed many more years to Social Security, making such a great effort, men and women who started working at the age of 14, with very long hours … and in many cases forced to retire early because we had to go to unemployment, because they fired us or due to illness or psychological problems, “explains to TVE Santiago Menchero, spokesman for the association. “It is not fair that they punish us in this way when the majority of our generation is the one that has made our country the way it is today,” he says.

The struggle of early retirees with more than 40 years of contributions: “It is not justice”

It is precisely in this situation that Manuel Barrera, 63, was forced to retire early after his company decided to dispense with his services due to an organizational restructuring as a result of the economic crisis. “We were not the oldest workers, in my case 56 years old, and hired younger people for half the salary”, He explains to “At that age it is very difficult or almost impossible to find a job, so first I ran out of unemployment, then I received the subsidy for those over 55 years of age and, when I turned 61, they took it away from me. So, I had two options: either I would retire early or I would be left with nothing, absolutely nothing, “he says.

Barrera then chose the first option, which had an immediate consequence: despite adding 45 years of contributions, your pension is penalized by 24% forever Or, at least, until the law changes. “At some point they have to take away these penalties, it just doesn’t make sense,” he laments.

Differences by sector and sex

Withdrawing from the labor market early is a measure requested by many workers; However, it can be done in several ways: through early retirement – whose rights are those claimed by workers with more than 40 years of contributions – or early retirement. While the first is fully regulated by Social Security, in the second the company also takes center stage until the worker reaches the legal retirement age. On this last case, they will be able to do so without suffering any penalty for it.

“It forces the company to hire another employee in your position and you collect most of the Social Security and another of the company until retirement age,” José Carlos Gallardo, 63 years old and 48 years old, explains to of them listed, in reference to their collective agreement -Reception Manager-, which includes this premise. Likewise, there are also a series of jobs that allow early retirement without penalty. These professions are recognized by Social Security and, depending on the period of contributions, retirement can be advanced in an equivalent time. For example, the Police, fire brigade or mining.

Demonstrations to “shield” pensions in the Constitution

On the other hand, the late incorporation of women into the world of work has also resulted in notable differences based on sex. According to Social Security data, early retirement is a modality that mostly men resort to, even more pronounced in the cases of ordinary retirement: less than 30% of early retirement pensions are received by women and this percentage reaches 40% taking into account total retirements. The figure is further reduced, to 23%, if only early retirements with contribution careers of 40 or more years are considered.

Flor Vadillo, 51 years old and 30 listed, acknowledges to that it is not within this group because “it is still young” and does not have enough period of listed years, but sympathizes with those affected and, therefore, He has also joined the Asjubi40 collective. “It would seem very very unfair to me that, reaching 40 years of contributions, I also have to continue working until 65 or 67 to be able to retire without penalty ”, points out this worker in the health sector.

Their demands have reached the Congress of Deputies

Asjubi40’s struggle dates back to 2016. Since then, they have promoted all kinds of initiatives to convince citizens, political parties and the Government that it is fair to eliminate the reduction coefficients in cases of early retirement with more than 40 years of contributions. On the one hand, they got a good part of the congressional groups to support their proposal -except Vox- and, on the other, that the Toledo Pact opened the door to a possible abolition of these mechanisms with the preparation of a report that would study the effects of decriminalizing these situations.

In the first case, they got groups with parliamentary representation such as ERC, Más País, EH-Bildu, Coalición Canarias and even Unidas Podemos, which is part of the Government, to become aware of their cause and submit several amendments with the aim of stopping the application of reducing coefficients to those self-employed or salaried workers who had more than 40 years of contributions. In fact, some had gone further in their proposal, such as BNG and ERC, who defended that 100% of the pension could be obtained with only 35 years of contributions.

However, the ‘purple’ formation, one of the heaviest, has decided to withdraw one of the amendments calling for this. “The truth is that we were taken by surprise that United We can have withdrawn one of the amendments that refers to ours, when in their program they ask that the early retirement of those people who have contributed 35 years, not 40 or more as we asked ”, underlines the Asjubi40 spokesperson.

On the other hand, the Minister of Inclusion, Social Security and Migrations, José Luis Escrivá, presented the report to the Toledo Pact on July 30, after exceeding the initial period granted by five months. Nevertheless, it only served to confirm his rejection of the measure, based, among others, on the fact that the majority of Spaniards retire having contributed more than 40 years; that the age for early retirement in other European countries is higher; and that the elimination of these coefficients would put the sustainability of the Spanish pension system at risk. In addition, the Government also refers to the ‘call effect’ that would be generated.

“We do not agree with what Minister Escrivá presented. In fact, we present a counter report where we show that the heap of money he said this could cost wasn’t real”Says Menchero. “In the first place, because in its calculation it included 1,600,000 people who were retired early, but of all of them there are only about 600,000 with 40 years or more in contributions. In addition, we show him that a person who has retired with 65 or 66 years and who has contributed 36 years, pays much less to Social Security than we do and on top of that they penalize us with 24 or 30% ”, explains the spokesperson.

An intermediate solution

In this context, the Government has offered, according to the document of the bill sent to Congress, a compensation bonus for early retirees with more than 44.5 years of contributions that could fluctuate between 4.5 and 82 euros per month, in relation to the pension cut that has been applied. The Ministry admits in its own report that there are 237,000 early retirees who could benefit from this measure, but 24,000 would be directly excluded because they are already receiving the maximum pension of the system.

However, for the collective it is not enough. “This is not done anywhere in Europe, on the contrary, these people are very much taken into account. In Portugal they solved it by eliminating the reducing coefficients. In France, people who started working at 14, 15, 16 years old also have the possibility to retire early, without coefficients. In Germany they ask for 44 years, but the reducing coefficients that are applied are less than half of what is applied here in Spain ”, explains the spokesman for Asjubi40.

24 hours – Table of the world: pension systems in European countries – Listen now

For this reason, they assure that they will continue fighting, although they take into account that, when the closing of the bill that is now being processed in Congress, their political action will be over. But they won’t throw in the towel. They are willing to take legal action, to reach the Constitutional or the European Union. “Where necessary as long as our rights are recognized,” they conclude.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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