General Scheme
Régimen General
Coverage
Mandatory insurance
- Workers over the age of 16 employed in industry and services and those assimilated as such who normally carry out their activity in national territory.
- Specifically included are, among others, domestic servants and employed agricultural workers.
- Civil and military officials who have entered service as of 01/01/2011 are included (only applicable to pensions, not applicable to other social benefits/social risks).
Exempted
- Employed workers included in any other special social security scheme.
Voluntary insurance
- No possibilities for voluntary insurance in this scheme.
Financing
General finances
- It is PAYG-financed from social security contributions paid by employers and employees.
- There is no specific contribution for old age pensions. Retirement falls within the legal concept of common contingencies together with other social risks.
Contribution rates
- Fixed share of monthly gross earnings (28.3%) with minimum (EUR 1,050 per month in 2020) and maximum contribution base ceilings (EUR 4,070.10 per month in 2020), depending on the professional category.
- Contributions are shared between employer (23.6%) and employees (4.7%).
Taxation of contribution payments
- Social contributions are deductible expenses from the Personal Income Tax.
Administration
- The ‘National Social Security Institute’ (Instituto Nacional de la Seguridad Social, INSS) manages the scheme.
Qualifying Conditions
Qualifying conditions
- Standard old age pension: The statutory retirement age increases to 67 in 2027. In 2020, the standard statutory retirement age is 65 years and 10 months, provided that at least 15 years of contribution are credited. For beneficiaries who reach or exceed 37 years of contribution, the retirement age remains at age 65.
- Minimum contribution period: 15 years, of which two years must fall within the 15 years immediately preceding the time of the qualifying event or the date on which the contribution ceased to be compulsory.
- The statutory compulsory retirement age is 65 for civil and military officials. Exceptions apply to professors of universities, magistrates, judges and lawyers of the administration of justice: statutory compulsory retirement age is 70.
Early retirement
- Available for occupational groups whose jobs are exceptionally arduous, dangerous, toxic or unhealthy and involve high mortality or morbidity rates and for workers with a major degree of disability (not before the age of 52).
- Early retirement due to membership in a mutual society (Mutualismo Laboral) from the age of 60 possible with negative (permanent) adjustments to pension benefits (max. 8% per year).
- Early retirement without being affiliated to a mutual society (Mutualismo Laboral) at age 61 is possible when the person has completed a minimum period of effective contributions of 30 years, two years of which must be within the 15 years immediately preceding the qualifying event, when the person is registered with the employment office as a jobseeker and has involuntarily had to cease work; with negative (permanent) adjustments to pension benefits (between 6 and 7.5% before the worker reaches the age of 65).
- Early retirement due to involuntary termination of work caused by restructuring of the business (no more than four years before reaching the standard retirement age) possible if person is registered with the employment office as a jobseeker, has completed a minimum period of effective contributions of 33 years, two years of which must be within the 15 years immediately preceding the qualifying event; with negative (permanent) adjustments to pension benefits for each quarter/3 months that the worker lacks to reach the legal retirement age (between 1.875% per quarter if the accredited contribution period is less than 38 years and 6 months, and 1.500% per quarter if the accredited contribution period is equal to or more than 44 years and 6 months).
- Voluntary early retirement (no more than two years before the standard retirement age) possible if person has completed a minimum period of effective contributions of 35 years, two years of which must be within the 15 years immediately preceding the qualifying event; with negative (permanent) adjustments to pension benefits for each quarter that the worker lacks to reach the legal retirement age (between 2% per quarter if the accredited contribution period is less than 38 years and 6 months, and 1.265% per quarter if the accredited contribution period is equal to or more than 44 years and 6 months).
Deferred retirement
- Retirement can be voluntarily deferred beyond the standard retirement age, on a full-time or part-time basis, after a minimum contribution period (37 years or more for persons aged 65, or less than 37 years of contribution for persons aged 65 and 10 months) has been completed, with special contribution considerations for specific groups (i.e. for occupational risks and for temporary incapacity to work); with positive (permanent) adjustments to pension benefits (2% per year for persons with up to 25 years of contribution, 2.75% per year for persons with 25 to 37 years of contribution, and 4% per year for persons with at least 37 years of contribution).
Combining employment & retirement
- Termination of employment is not a precondition for claiming pension benefits.
- Partial retirement is possible and can be started before or after reaching the standard retirement age.
- Flexible retirement is possible and implies the option to make the retirement pension compatible, once in effect, with a part-time contract (reduction in working hours between 25% and 75%/85%), with the resulting reduction of the pension being inversely proportional to the reduction applicable to the pensioner's working hours, in relation to that of a comparable full-time worker.
- In cases of compatibility of pension and work, there is a special solidarity contribution of 9% of the contribution base for common contingencies shared between the employer (7%) and the employee (2%).
Benefits
Pension benefits
- Pension is primarily based on the amount of contributory earnings over the last 23 years and the amount of pension-credited periods (min. of 15 years; max. of 36 years).
- A minimum amount is legally guaranteed to all pensioners in the form of the minimum supplements to contributory pensions.
- Maximum amount: pension benefits can never exceed the amount of the maximum pension set for each year (EUR 2,683.34 per month in 2020).
- A supplement for the reduction of the gender gap is applied to the contributory pensions of those beneficiaries who have had one or more children.
Benefit calculation
- The amount of the pension is determined by applying a variable percentage to the regulatory base, which is the average of contributions paid by the worker in a given time period.
- When retirement occurs at a higher age than the standard retirement age, an additional percentage for the prolongation of working life is applied.
- In 2020, the pension amount is calculated on the basis of the last 23 years of contribution. The regulatory base is calculated by dividing the contribution bases during the 276 months immediately preceding the month of the qualifying event by 322.
- In 2020, the percentage applicable to the regulatory base is 50% for the first 15 years of contribution; for each additional month between months 1 and 106: 0.21%; and for the following 146 months: 0.19%. These percentages are applied on a transitional basis. From 2027 onwards the number of additional months and the applicable percentages will change.
- In 2020, 36 years of contribution will be necessary to reach 100% of the pension. From 2027 onwards it will be 37 years.
- Adjustments: yearly adjustment of pension benefits based on the revaluation index provided for in the corresponding General State Budget Act (in 2020, 0.9%).
Taxation and social security contributions
- Pension benefits are subject to tax according to the rules applicable to income from work.
- Pension benefits are not subject to social contributions.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Mandatory insurance
- Workers over the age of 16 employed in industry and services and those assimilated as such who normally carry out their activity in national territory.
- Specifically included are, among others, domestic servants and employed agricultural workers.
- Civil and military officials who have entered service as of 01/01/2011 are included (only applicable to pensions, not applicable to other social benefits/social risks).
Exempted
- Employed workers included in any other special social security scheme.
Voluntary insurance
- No possibilities for voluntary insurance in this scheme.
General finances
- It is PAYG-financed from social security contributions paid by employers and employees.
- There is no specific contribution for old age pensions. Retirement falls within the legal concept of common contingencies together with other social risks.
Contribution rates
- Fixed share of monthly gross earnings (28.3%) with minimum (EUR 1,050 per month in 2020) and maximum contribution base ceilings (EUR 4,070.10 per month in 2020), depending on the professional category.
- Contributions are shared between employer (23.6%) and employees (4.7%).
Taxation of contribution payments
- Social contributions are deductible expenses from the Personal Income Tax.
- The ‘National Social Security Institute’ (Instituto Nacional de la Seguridad Social, INSS) manages the scheme.
Qualifying conditions
- Standard old age pension: The statutory retirement age increases to 67 in 2027. In 2020, the standard statutory retirement age is 65 years and 10 months, provided that at least 15 years of contribution are credited. For beneficiaries who reach or exceed 37 years of contribution, the retirement age remains at age 65.
- Minimum contribution period: 15 years, of which two years must fall within the 15 years immediately preceding the time of the qualifying event or the date on which the contribution ceased to be compulsory.
- The statutory compulsory retirement age is 65 for civil and military officials. Exceptions apply to professors of universities, magistrates, judges and lawyers of the administration of justice: statutory compulsory retirement age is 70.
Early retirement
- Available for occupational groups whose jobs are exceptionally arduous, dangerous, toxic or unhealthy and involve high mortality or morbidity rates and for workers with a major degree of disability (not before the age of 52).
- Early retirement due to membership in a mutual society (Mutualismo Laboral) from the age of 60 possible with negative (permanent) adjustments to pension benefits (max. 8% per year).
- Early retirement without being affiliated to a mutual society (Mutualismo Laboral) at age 61 is possible when the person has completed a minimum period of effective contributions of 30 years, two years of which must be within the 15 years immediately preceding the qualifying event, when the person is registered with the employment office as a jobseeker and has involuntarily had to cease work; with negative (permanent) adjustments to pension benefits (between 6 and 7.5% before the worker reaches the age of 65).
- Early retirement due to involuntary termination of work caused by restructuring of the business (no more than four years before reaching the standard retirement age) possible if person is registered with the employment office as a jobseeker, has completed a minimum period of effective contributions of 33 years, two years of which must be within the 15 years immediately preceding the qualifying event; with negative (permanent) adjustments to pension benefits for each quarter/3 months that the worker lacks to reach the legal retirement age (between 1.875% per quarter if the accredited contribution period is less than 38 years and 6 months, and 1.500% per quarter if the accredited contribution period is equal to or more than 44 years and 6 months).
- Voluntary early retirement (no more than two years before the standard retirement age) possible if person has completed a minimum period of effective contributions of 35 years, two years of which must be within the 15 years immediately preceding the qualifying event; with negative (permanent) adjustments to pension benefits for each quarter that the worker lacks to reach the legal retirement age (between 2% per quarter if the accredited contribution period is less than 38 years and 6 months, and 1.265% per quarter if the accredited contribution period is equal to or more than 44 years and 6 months).
Deferred retirement
- Retirement can be voluntarily deferred beyond the standard retirement age, on a full-time or part-time basis, after a minimum contribution period (37 years or more for persons aged 65, or less than 37 years of contribution for persons aged 65 and 10 months) has been completed, with special contribution considerations for specific groups (i.e. for occupational risks and for temporary incapacity to work); with positive (permanent) adjustments to pension benefits (2% per year for persons with up to 25 years of contribution, 2.75% per year for persons with 25 to 37 years of contribution, and 4% per year for persons with at least 37 years of contribution).
Combining employment & retirement
- Termination of employment is not a precondition for claiming pension benefits.
- Partial retirement is possible and can be started before or after reaching the standard retirement age.
- Flexible retirement is possible and implies the option to make the retirement pension compatible, once in effect, with a part-time contract (reduction in working hours between 25% and 75%/85%), with the resulting reduction of the pension being inversely proportional to the reduction applicable to the pensioner's working hours, in relation to that of a comparable full-time worker.
- In cases of compatibility of pension and work, there is a special solidarity contribution of 9% of the contribution base for common contingencies shared between the employer (7%) and the employee (2%).
Pension benefits
- Pension is primarily based on the amount of contributory earnings over the last 23 years and the amount of pension-credited periods (min. of 15 years; max. of 36 years).
- A minimum amount is legally guaranteed to all pensioners in the form of the minimum supplements to contributory pensions.
- Maximum amount: pension benefits can never exceed the amount of the maximum pension set for each year (EUR 2,683.34 per month in 2020).
- A supplement for the reduction of the gender gap is applied to the contributory pensions of those beneficiaries who have had one or more children.
Benefit calculation
- The amount of the pension is determined by applying a variable percentage to the regulatory base, which is the average of contributions paid by the worker in a given time period.
- When retirement occurs at a higher age than the standard retirement age, an additional percentage for the prolongation of working life is applied.
- In 2020, the pension amount is calculated on the basis of the last 23 years of contribution. The regulatory base is calculated by dividing the contribution bases during the 276 months immediately preceding the month of the qualifying event by 322.
- In 2020, the percentage applicable to the regulatory base is 50% for the first 15 years of contribution; for each additional month between months 1 and 106: 0.21%; and for the following 146 months: 0.19%. These percentages are applied on a transitional basis. From 2027 onwards the number of additional months and the applicable percentages will change.
- In 2020, 36 years of contribution will be necessary to reach 100% of the pension. From 2027 onwards it will be 37 years.
- Adjustments: yearly adjustment of pension benefits based on the revaluation index provided for in the corresponding General State Budget Act (in 2020, 0.9%).
Taxation and social security contributions
- Pension benefits are subject to tax according to the rules applicable to income from work.
- Pension benefits are not subject to social contributions.
Legal Basis: Royal Legislative Decree 8/2015 of 30 October approving the consolidated text of the General Social Security Act (Real Decreto Legislativo 8/2015, de 30 de octubre, por el que se aprueba el texto refundido de la Ley General de la Seguridad Social); Royal Decree 1131/2002 of 31 October on social security for part-time workers and partial retirement (Real Decreto 1131/2002, de 31 de octubre, por el que se regula la Seguridad Social de los trabajadores contratados a tiempo parcial, así como la jubilación parcial); Royal Decree-Law 5/2013 of 15 March on measures to encourage older workers to continue working and promote active ageing (Real Decreto-ley 5/2013, de 15 de marzo, de medidas para favorecer la continuidad de la vida laboral de los trabajadores de mayor edad y promover el envejecimiento activo).