Workplace Report (October 2003)

Features: News Europe

Spanish civil servants get additional pension

Earlier this month the main Spanish unions and the Spanish ministry for public administration signed a new agreement on improving pensions for the around 500,000 workers employed in central government, including the armed forces and the national police.

The agreement establishes for the first time a funded system of pensions for civil servants which will be paid in addition to their state pension.

Funded systems, where the employer pays a fixed amount into a fund each year and employees on retirement have the right to benefit from the amount accrued plus the returns on investment, have become increasingly common in the private sector in Spain. However, this is the first major extension into the public sector.

The initial contribution, of 0.5% of the total salary bill, is relatively small but the agreement makes it clear that it is on top of existing state pensions and that the sum in the future will be the subject for further collective bargaining. The outlines of the scheme were agreed as part of the pay settlement last November.

The unions have welcomed the setting up of the new scheme which they see as a step towards moving the amount received in retirement closer to former earnings.

One of the two major union confederations, the CCOO, described it as having "great potential for the future", as at a stroke it doubles the number of employees covered by additional funded pensions.

Employee representatives will have half the seats in the body controlling the fund.


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