Spain agrees plan to raise retirement age to 67

28th January 2011, Comments 0 comments

Spain's government said Friday it had agreed to raise the retirement age to 67 from 65, a bitterly fought reform aimed at repairing public finances and soothing markets.

Closely watched by markets as a sign of Madrid's determination to keep long-term spending on track, the outline deal was reached after one-and-a-half months of talks with unions and business chiefs.

An agreement with the country's two major unions was reached in the early hours of the morning ahead of the cabinet meeting.

"The deal is important," Deputy Prime Minister Alfredo Perez Rubalcaba told a news conference after a cabinet meeting approved the scheme.

"It seeks to confront the great problem of Spanish society: economic recovery and job creation, that is the heart of it," he said on a day Spain announced a 13-year record unemployment rate of 20.33 percent at the end of 2010.

Under the outline agreement, the retirement age will be gradually raised from 65 to 67, but with a list of exceptions:

-- Special treatment for women who stop work to look after children.

-- Retirement before 67 for workers in dangerous or arduous jobs.

-- Full pension at 65 for workers with 38 and a half years of contributions, and lower pensions for those who retire at 65 with fewer contributions.

-- Early retirement from 63 but with a lower pension for those who have at least 33 years of contributions. And retirement from 61 in "crisis situations" for those with at least 33 years of contributions, also at less than full pensions.

The reform will be implemented between 2013 et 2027, with an extra month of contributions each year for the first six years, and an extra two months a year of contributions thereon.

© 2011 AFP

0 Comments To This Article