Early Retirement – Specialist Employment Lawyer

In this post, we focus specifically on the rules governing early retirement.

What is the amount of an early retirement pension?

The Spanish Social Security system allows workers to retire before reaching the standard statutory retirement age. However, early retirees do not receive 100% of their entitled pension. Instead, reduction coefficients are applied to the pension amount, reducing it in proportion to how early the worker retires.

These reduction percentages depend on:

the type of early retirement requested — voluntary or involuntary.
the number of years of contributions made.

How do I retire early?

The requirements to access voluntary early retirement are:

Being at most two years younger than the applicable statutory retirement age in each case
Being registered with Social Security or in an equivalent recognised status.
- 35 years.
- Of the contribution period, at least 2 years must fall within the 15 years immediately preceding the date on which early retirement is accessed from a situation of active registration or equivalent, with no obligation to contribute.
- In the case of part-time workers the rules established in Royal Decree-Law 11/2013, of 2 August, shall apply from 4 August 2013 onwards, in order to satisfy the minimum contribution period of 35 years.
  A minimum period of effective contributions of:
The pension amount must be higher than the minimum pension at age 65. If this condition is not met, access to this form of early retirement will not be permitted.

Can early retirement be accessed following a disciplinary dismissal?

As noted above, the requirements for voluntary early retirement include being in active registration status or an equivalent situation. In the event of a disciplinary dismissal and subsequent access to unemployment, the employee is placed in a situation equivalent to active registration. Accordingly, a disciplinary dismissal does entitle the worker to early retirement, albeit under different conditions and amounts than those applicable to involuntary early retirement.

INVOLUNTARY early retirement:

In the case of involuntary early retirement — that is, retirement resulting from the non-voluntary termination of the employee's employment, — the conditions are more favourable compared with those for voluntary early retirement.

It may be accessed through:

Individual dismissal or Collective Dismissal Procedure (ERE) on objective grounds for economic, technical, organisational or production-related reasons.
Termination of contract by court order.
Death, retirement or incapacity of a sole trader employer.
Termination of the employment contract due to force majeure.

The termination of employment of a female worker as a result of being a victim of gender-based violence will also give access to this form of early retirement.

For points 1 and 2, it will be necessary to provide proof of bank transfer received or equivalent documentary evidence confirming that the corresponding severance payment was received, or that a judicial claim has been filed claiming such payment or challenging the termination decision.

In any case, additionally:

the employee must have reached an age that is no more than four years below, the required retirement age.
the employee must be registered with the employment office as a jobseeker for a period of at least 6 months before applying for retirement.
A minimum contribution period of 33 years is required, of which at least two years must fall within the 15 years immediately preceding the date on which entitlement arises or the date on which the obligation to contribute ceased.

Amount of Early Retirement Pension:

The pension amount is calculated by applying to the regulatory base the general percentage corresponding to the number of years of contributions, together with the applicable reduction coefficient.

The resulting amount will be reduced by applying, for each quarter or fraction of a quarter remaining until the employee reaches the applicable statutory retirement age at the time the entitlement arises, the following coefficients based on the accredited contribution period:

Voluntary Early Retirement:

A reduction coefficient of 2% per quarter where the verified contribution period is less than 38 years and 6 months.
A reduction coefficient of 1.875% per quarter where the verified contribution period is equal to or greater than 38 years and 6 months but less than 41 years and 6 months.
A reduction coefficient of 1.750% per quarter where the verified contribution period is equal to or greater than 41 years and 6 months but less than 44 years and 6 months.
A reduction coefficient of 1.625% per quarter where the verified contribution period is equal to or greater than 44 years and 6 months.

Involuntary Early Retirement:

A reduction coefficient of 1.875% per quarter where the verified contribution period is less than 38 years and 6 months.
A reduction coefficient of 1.75% per quarter where the verified contribution period is equal to or greater than 38 years and 6 months but less than 41 years and 6 months.
A reduction coefficient of 1.625% where the contribution period is equal to or greater than 41 years and 6 months but less than 44 years and 6 months.
A coefficient of 1.5% per quarter where a contribution period of 44 years and 6 months or more is demonstrated.

INFORMATION WE NEED FOR RETIREMENT assessments:
- Up-to-date employment history report.
- Up-to-date Social Security contribution bases report.
- Copy of national identity document (DNI or equivalent).
- Copy of the employment contract (in order to identify the applicable collective bargaining agreement).
- Please indicate whether you have made Social Security contributions abroad, and if so, in which country.
- Home address.
- Mobile number and email address.
- Marital status: married, single, divorced, etc.
- Spouse's details: first name, surname(s), identity document number, date of birth.
- Children's details: first name, surname(s), identity document number, date of birth.
- Details of any co-habitants: first name, surname(s), national ID number, date of birth.
- Effective date of retirement.
- Income received other than employment earnings.

Relief contract and access to partial retirement:

In certain sectors, collective bargaining agreements allow companys to retire an employee early, provided that a relief contract is entered into at the same time — meaning another employee is hired to take their place.

From April 2025, it will be possible to bring forward retirement by up to three years (so if the standard retirement age is 65, early retirement will be available from age 62).

Relief contract:
- The relief employee must be hired on a permanent, full-time basis.
- This contract must be maintained for at least two years after the partially retired employee's partial retirement comes to an end.

Partial retirement with a relief contract:

Provided that a relief contract is entered into simultaneously on the terms set out in Article 12.6 of the Workers' Statute (ET), full-time employees may access partial retirement if they meet the following requirements:

They must be employed on a full-time basis.

A permanent, full-time relief contract must be entered into at the same time.

Minimum age (without applying any age reduction factors): at the date the entitlement arises, the employee must be no more than three years below the standard retirement age applicable to their case.
Working hours reduction:
- In the first year, working hours may be reduced by between 20% and 33%.
- In the second year, working hours may be reduced by between 25% and 75%.
These percentages shall be understood as referring to the working hours of a comparable employee on a full-time contract.

Minimum contribution period:
- 33 years of actual contributions, excluding any proportional portion of extra payments. For this purpose only, the period of compulsory military service, alternative civilian service, or compulsory women's social service shall be counted, up to a maximum of 1 year.
- 30 years of actual contributions, excluding any proportional portion of extra payments and excluding the period of compulsory military service or alternative civilian service, for those to whom the fourth transitional provision, paragraph 5, applies.
- 25 years, in the case of persons with a disability of 33% or more, as of 1 January 2013.
Length of service with the company: at least 6 years immediately prior to the date of partial retirement. For this purpose, length of service accrued with a previous company shall be counted where a business transfer has taken place within the meaning of Article 44 of the ET , or within companies belonging to the same group.
Contributions during partial retirement:

In cases where the fourth transitional provision, paragraph 5, does not apply, during the period of partial retirement, the company and the employee shall contribute on the basis of the contribution base that would have applied had the employee continued working full-time.