Socialists plan further top-up of state pension piggy bank

18th January 2008, Comments 0 comments

Spanish Labour Minister Jesús Caldera said yesterday the ruling Socialist government plans next month to add a further EUR 5 billion to the Social Security's Reserve Fund.

18 January 2008

MADRID - Spanish Labour Minister Jesús Caldera said yesterday the ruling Socialist government plans next month to add a further EUR 5 billion to the Social Security's Reserve Fund.

The government approved a similar top-up of EUR 4 billion in February of last year and another injection of EUR 4.3 billion in July. The government plans total additions of 9.5 billion for this year.

The reserve fund, which was set up in 2000 and provides cover for state pensions, totalled EUR 45.715 billion at the end of last year, equivalent to 4.3 percent of the country's GDP. The figure represented an increase of 27.4 percent over a year earlier.

The fund currently covers state pension payment obligations for eight months.

Caldera also said if the ruling Socialists win the general elections on 9 March, the new government will propose investing part of the fund in the stock market.

At present, the fund is invested only in government debt issues, 51.35 percent in Spain, with the balance in Germany, The Netherlands and France.

The minister said similar funds in countries such as France, Germany, Sweden, Norway and Japan had successful results from diversifying their investments in the stock markets.

[Copyright EL PAÍS 2008]

Subject: Spanish news

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