Is more than assumed that the worker upon retirement will lose purchasing power. A boat soon, a worker with an annual salary of 50,000 euros, will receive one-third less when you retire. If you earn 100,000 euros, will face old age with a decline in revenue of 66%. Therefore, it is not surprising that the minister of Labor, Celestino Corbacho, recommend be done with a private pension plan to offset that loss.
Private pension plans are an alternative savings to cope with the loss of purchasing power that comes with retirement. But why this loss occurs? Basically for two reasons.
The first is because there are workers who are paid monthly salaries above the maximum contribution base for Social Security (3,198 euros). The second, because to charge 100% of the base, the retired employee must be removed at least 65 and have 35 years of contributions. Moreover, to calculate the retirement pension until now used the last 15 years, although the Government does not rule out extending to 20 years and even raising the retirement age to 67 years.
Not counting, which is in question the viability of the current public pension system by an aging population. For all these reasons, the Labor Minister Celestino Corbacho, opened the debate by acknowledging that he had a private pension plan, which would complete his pension.
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Private Pension Plans
