The new system will be built based on four subsystems or "pillars," which will operate in parallel and will be applied according to each member's choice or situation. These subsystems or pillars are noncontributory, semi-contributory, contributory and voluntary.
The regulations of the law must be issued within 180 working days.
The main changes of this new pension system are as follows:
| Pillars of the new pension system |
Noncontributory pillar
- Aimed at: people who have not been able to contribute during their working life
- Administration and financing: public
- Purpose: to ensure welfare coverage (pension) for people who, at retirement age, (i) do not have a proportional pension and (ii) are vulnerable. It also insures people with severe disabilities and vulnerable groups
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Semi-contributory pillar
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Contributory pillar
- Aimed at: individuals who have contributed throughout their professional career
- Administration and financing: private
- Purpose: to grant retirement, disability, survival and burial benefits, according to the corresponding regime, subject to compliance with the requirements established in the corresponding regulations
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Voluntary pillar
- Aimed at: As it is complementary to the system, it can apply to any pillar
- Administration and financing: private, through allowances or voluntary contributions
- Purpose: to improve pensions or supplement contributions — includes contributions made through the mechanism of contributions by sales tax
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| What will membership be like after the standard is issued? |
Upon reaching 18 years of age, citizens must join the system, choosing between the SNP or SPP. If they do not make a choice, they will be affiliated with the SNP.
Persons who are affiliated with the SNP or SPP when the law enters into force are considered to be affiliated with the new system.
Persons over 18 years of age who are not affiliated with the system on the date that the law enters into force are compulsorily affiliated with the SNP or SPP. If they do not make a choice, they will be affiliated with the SPP.
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| Increase in the age for early retirement |
With the incorporation of this new system, the age requirement to access an early, ordinary early or unemployment early pension has been increased from 50 to 55 years. |
| Elimination of the possibility of withdrawing 95.5% of the funds for those under 40 years of age |
New affiliates of the system and SPP affiliates under 40 years of age on the date that this law enters into force will no longer be able to withdraw 95.5% of the total funds available in their CIC, as was allowed under the previous law. |
| Pension system for self-employed workers |
A mandatory contribution rate for self-employed workers has been implemented.
It is a gradual rate starting on 1 January 2028 (the third year after the new law comes into force), applying a rate of 2%, which will be increased by one percentage point every two years up to a maximum of 5%.
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| Prohibition of early withdrawals in the private pension system |
As of the entry into force of the law, the total or partial withdrawal of funds accumulated in the individual accounts of mandatory contributions by members of the SSP is prohibited.
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| Incorporation of the consumer pension |
A spending contribution has been created, which is a complementary contribution of a social security nature, derived from the ordinary expenses incurred by members of the system.
This contribution is calculated annually and is equal to 1% of the amount of the expenses.
To be considered in the calculation of this contribution, the expenses must comply the following:
- An electronic sales receipt supporting the acquisition of the goods or their use
- Electronic debit and credit notes
In both cases, the affiliates' names, surnames and ID numbers must be included.
The spending contribution is intangible and unseizable. It cannot be used for any purpose other than social security.
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| Employer contributions |
The Government will carry out a study and, subsequently, issue a legislative proposal for the incorporation of a percentage of mandatory employer contributions for each employeer of both the SNP and the SPP. |
We hope this information is relevant to you and your company. Please do not hesitate to contact us if you require any advice in this regard.
Click here to read the Spanish version.
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