Retirement under the General Social Security Scheme

Written by Josep Conesa

Employment and insolvency lawyer

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BENEFICIARIES:

1.- Persons included in the General Scheme who are registered and active contributors, or in a situation treated as equivalent to active contribution, and who meet the conditions regarding age, minimum contribution period and qualifying event, as set out in the sections below.

2.- Workers affiliated to the Social Security system who, at the date of the qualifying event, are not active contributors or in a situation treated as equivalent to active contribution, provided they meet the required age and contribution conditions.

AGE CONDITIONS:

General rule: Having reached the age of 65.
Exceptions: The retirement age may be reduced — but only for active contributors or those in an equivalent situation — in certain specific cases:

· From the age of 60, with application of the reduction coefficients set out below, for those who were contributors to any of the Workers' Labour Mutual Societies (Mutualidades Laborales) as employed workers prior to 1 January 1967:

· The possibility of retiring before the age of 65 without applying the above reduction coefficients exists in certain cases subject to specific rules, including: the special retirement at age 64; partial retirement; retirement under the Mining Statute; retirement of aerial work flight crew; as well as specific provisions for performing artists, railway workers and bullfighting professionals.

MINIMUM CONTRIBUTION PERIOD REQUIRED:

Workers registered with Social Security or in an equivalent status:
· General contribution period: 15 years.
· Specific contribution period: 2 years, which must fall within the 15 years immediately preceding the date on which entitlement arises, or the date on which the obligation to contribute ceased, where the retirement is accessed from a registered or equivalent status without any obligation to contribute.Workers who are neither registered nor in an equivalent status:
· General contribution period: 15 years.
· Specific contribution period: 2 years, which must fall within the 15 years immediately preceding the date on which entitlement arises.

QUALIFYING EVENT:

Depending on the circumstances from which the pension is accessed, the qualifying event is deemed to occur as follows:

· On the date of cessation of employment, where the employee is registered with Social Security.
· On the date the application is submitted, in situations equivalent to registered status, with the following exceptions:
    · In the case of compulsory leave of absence, on the date of cessation of the position that gave rise to the equivalent status.
    · In the case of transfer outside national territory, on the date of cessation of employment as an employed worker.
· On the date the application is submitted, where the worker is not registered with Social Security.

PENSION AMOUNT:

The amount is calculated by applying the relevant percentage to the regulatory base. This percentage varies according to the number of years of contributions to Social Security, on a sliding scale that starts at 50% for 15 years of contributions, increasing by 3% for each additional year between the sixteenth and twenty-fifth year, and by 2% from the twenty-sixth year onwards, up to a maximum of 100% at 35 years.

Where retirement is taken from the age of 60, the percentage derived from the years of contributions will be reduced by the application of age-based reduction coefficients, which vary depending on the worker's age.

FINANCIAL EFFECT:

Workers registered with Social Security: Payment takes effect from the day following the qualifying event, provided the application was submitted within 3 months of that date or prior to cessation of employment. Otherwise, payments will be backdated by a maximum of 3 months from the date on which the application was submitted.

Workers in a situation treated as equivalent to active registration: From the day following the date of the application, or when the triggering event occurs, depending on the specific equivalent situation involved.

Workers who are not actively registered: From the day following the date of submission of the application.

INCOMPATIBILITIES:

The pension is incompatible with carrying out employed or self-employed work (with the exception of the partial retirement pension, which is compatible with part-time work), or with carrying out activities for any Public Administration that result in inclusion in the General Scheme or any of the Special Schemes of Social Security. Carrying out such work produces the following effects:

· The retirement pension is suspended, as is the healthcare entitlement associated with pensioner status.
· The employer is required to register the worker and pay the corresponding Social Security contributions.

Any new contributions serve to increase the percentage of the pension, or to reduce or remove the reduction coefficient that would have applied when calculating the initial pension, in cases of retirement from the age of 60. Under no circumstances may new contributions alter the regulatory base.

TERMINATION:

The pension is terminated upon the death of the pensioner or as a result of an administrative sanction.

PAYMENT:

Payment is made monthly, with two extra payments per year, paid alongside the June and November instalments. The extra payments are paid in sixths, calculated according to the start and end dates of the pension.

retirement pensioners are guaranteed minimum amounts based on age and family circumstances. The pension, including the minimum pension amount, will be increased at the start of each year in accordance with the Consumer Price Index forecast for that year.