Press release

CEOE and Pérez-Llorca discuss employee pension plans


Conference to address the main institutional aspects and the technical, legal and implementation issues and identify the strengths and weaknesses of this new regulation.

Following the recent legislation aimed at promoting employee pension plans as a complement to the public pension system, CEOE and Pérez-Llorca organised a conference to address the main institutional aspects and the technical, legal and implementation issues and identify the strengths and weaknesses of this new regulation. The aim was to contribute positively to the application and improvement of a system of extraordinary importance in the current framework of social protection for retirement.

The session was opened by Luis Enrique Fernández Pallarés, partner of Pérez-Llorca’s Employment, Compensation and Benefits practice area; Rosa Santos, Director of CEOE’s Employment, Diversity and Social Protection department; and Yolanda Valdeolivas, Of Counsel of Pérez-Llorca’s Employment, Compensation and Benefits practice area.

In her speech, Rosa Santos voiced her regret that the government had promoted a regulation such as the one on occupational pension plans “without a global and integrating vision” and that it had done so “sacrificing the third pillar” of the pension system. Santos highlighted some of the points of disagreement with the executive on this issue, such as insufficient incentives, the established governance model and the role of collective bargaining.

In any case, she noted that the CEOE has encouraged the sectors to promote complementary welfare schemes as a necessary addition to the public pension system and to do so within the framework of collective bargaining, giving as an example what has been done in the construction sector.

Fernandez-Pallarés and Valdeolivas went on to stress the importance of the regulation to consolidate employment pension plans as a complement to the public pension system. They insisted on the opportunity provided by this regulation to strengthen the second pillar of pension protection, which is required in the Spanish system to increase medium- and low-income workers and sectors with a majority presence of small- and medium-sized companies to access complementary collective social security mechanisms. This objective should be encouraged by a system of social and tax benefits, in addition to simplifying the operation of this social security framework and reducing its management costs. The role of collective bargaining in the success of this model was highlighted, and it is hoped that collective agreements will take on this bargaining content as a standard in order to draw up remuneration policies that are more wide-ranging, more varied, more adapted and more effective.

This was followed by the round table discussion on “Objectives and Context of the Legal Regulation”, moderated by Yolanda Valdeolivas and with the participation of Olimpia del Águila, Head of Social Security and Equality at CEOE; Carlos Bravo, Secretary of Social Protection and Public Policies at CCOO; and Fernando Luján, Confederal Secretary of UGT. The roundtable was an opportunity to understand the views of the speakers from their privileged position as interlocutors with the government in the social dialogue that led to this legislation, appreciating their considerable common ground and the occasional disagreement.

Olimpia del Águila stressed that pension reform should have been approached with a holistic view, with the aim of bringing each pillar of the system to the highest level of efficiency, so that each pillar interacts well with the others while facing its own challenges in an appropriate and sustainable fashion. However, “a fragmented, phased negotiation was imposed on us, which did not allow us to see the final picture, which was somewhat inconsistent” and where, in the end, the third pillar was “strangled” with its funds transferred to the second pillar of the system.

In any case, she stressed that the project puts on the table “the duties” that collective bargaining has in this area, such as the promotion of complementary social security, the implementation of which “will depend a lot on the support and incentives” proposed. “But I have confidence in the insurance and pension industry to come through,” she added.

For his part, Fernando Luján framed the regulation within the Plan for Recovery, Transformation and Resilience, aimed at restoring the economy. Component 30 of the Plan, “Long-term sustainability of the public pension system within the framework of the Toledo Pact”, includes a commitment to reviewing and promoting complementary pension systems through a new legal framework that supports employment plans and publicly promoting pension funds for workers without employment plans in their companies and the self-employed. The importance of collective bargaining, preferably on a sectoral basis, was highlighted, and the example of the General Construction Agreement was analysed as a model to be replicated in this field.

Lastly, Carlos Bravo highlighted the new regulation’s incorporation of elements of interest and in line with the recommendations of the Toledo Pact, which differentiates between the second and third pillars of social protection, with a clear commitment to employment systems that reinforce the principle of non-discrimination. He agreed with other speakers on the regulation’s potential to revitalise a matter that has not been further developed since 2006. However, this initially optimistic view did not prevent him from pointing out that the approved regulation has room for improvement, noting some critical aspects, including the fact that it contains elements which are alien to the Spanish pension plan system, alongside other technical problems and major inconsistencies. Bravo ultimately insisted on the need to support this model, which is capable of extend complementary welfare schemes across the board, and to avoid confrontation with the public retirement system.

After this debate, Laura Pérez, partner of Pérez-Llorca’s Employment, Compensation and Benefits practice area, and Joaquín Ruiz Echauri, partner of Pérez-Llorca’s Insurance and Reinsurance practice area, led the conversation between Mirenchu del Valle, Secretary General of UNESPA, and Raúl Leyenda, Director of Pensions at Nationale Nederlanden, the insurance sector’s perspective on this new regulation. Both partners stressed the interest of listening to this sector in order to have a comprehensive view on the important milestone that the new model represents for the second pillar (complementary welfare schemes in companies), but also what perspective it can provide on the system’s shortcomings, in particular given the situation that the third pillar (complementary welfare schemes for individuals) has been left in.

Chief among Mirenchu del Valle’s messages was the need for the three pillars of the system to play a balanced and joint role in order to ensure sufficient savings when retiring, criticising the promotion of the second at the expense of the third and calling for more information on the expected pension in order to be able to organise the supplementary pension in an informed manner. She advocated that workers’ contributions should not be limited in the second pillar by the value of the company’s contributions and should have an adequate and generous contribution limit in the third pillar, stressing the advisability of differentiating needs depending on closeness to retirement. Among the legal problems, she voiced her regret about the absence of a transitional regime limiting the use of the full potential of the third pillar until the full implementation of the second pillar, which she predicted would take a long time and begin with modest contributions.

Raúl Leyenda then focused on conveying the insurance sector’s perception of the new regulation and its role in the development of the second pillar, expressing doubts about the obligatory nature of the system and about the limitation of workers’ contributions, ending by bemoaning how the second pillar is being built up at the expense of the third pillar, reducing opportunities for savers. He advocated extending the model to as many companies as possible and educating companies and employees about the advantages and possibilities of employment plans.