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Only One in Four Spanish Companies Offers Employee Pension Plans
🇪🇸 Spain /Economy & Trade

Only One in Four Spanish Companies Offers Employee Pension Plans

From El País · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Only 27% of companies in Spain offer pension plans as an employee benefit, a figure that has remained stagnant for nine years.
  • Companies cite rising labor costs, including minimum wage increases and higher social security contributions, as the primary reason for not developing these plans.
  • Despite the stagnation, employee interest in retirement plans is growing, with 24% preferring them over other benefits, though medical insurance remains the most desired benefit.

In Spain, a mere 27% of companies provide at least one pension plan for their employees as part of their social benefits package. This percentage has shown virtually no change since the study's inception nine editions ago, indicating a persistent stagnation in corporate retirement planning.

Despite recent years seeing improved tax incentives for company-sponsored savings plans, officially known as employment plans, businesses largely blame the rise in labor costs for this standstill. Specifically, they point to increases in the minimum wage and general salary hikes, coupled with higher social security contributions resulting from recent pension reforms, as major deterrents.

"Companies tell us that with the rise in labor costs, they are up against the wall and have no money for these plans," explained Álvaro Granado, head of the Pension Tax Area at KPMB Abogados, during the study's presentation. The study, which analyzes the state of Spain's public pension system, the impact of reforms since 2021, and corporate practices in employee retirement provision, surveyed 80 companies.

Interestingly, employee interest in retirement plans is on the rise. While medical insurance remains the most sought-after benefit, chosen by 59% of workers, pension plans have climbed to second place, preferred by 24% of employees. Meal vouchers (9.6%), training (6%), and life insurance (1.2%) follow further behind.

The study also highlights Spain's low investment in retirement financial instruments compared to other European Union countries. Assets dedicated to post-retirement income represent only 12% of Spain's GDP, significantly lower than Denmark (192%) and the Netherlands (151%). This disparity is notable as these countries rely more heavily on private systems to supplement lower public pension coverage, whereas Spain's public system guarantees an initial pension equivalent to about 80% of the last salary.

Companies tell us that with the rise in labor costs, they are up against the wall and have no money for these plans.

— Álvaro GranadoThe head of the Pension Tax Area at KPMB Abogados explained the reasons behind companies' reluctance to offer pension plans.
DistantNews Editorial

Originally published by El País in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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