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Economic Studies Series

As growth of financial obligations arising from the existing public pension system becomes evident, clouds are gathering over the viability of the system in coming years. The enormous importance of retirement benefits for the proper functioning of the society and the State, the controversy around the proper analysis of the problem, the multiplicity of reform instruments applicable and the difficulty in implementing any possible solution make this one of the most sensitive questions in the current political debate.This is a debate still being carried on between frontiers which run from a reality poorly perceived, a future scarcely explored to any depth along with a considerable dose of alarmism.

The aim of this monograph is to contribute to improving the quality of the debate about the future of pensions with two complementary studies, one economic and the other sociological. It starts out from a reference scenario based on a core projection of a demographic and macroeconomic nature, with a time horizon up to the year 2025, which establishes the financial prospects of Spain's contributive or Social Security pension system under the supposition that no changes are made in existing legislation. In virtue of the model applied it is possible to deal in substantial detail with the trend in spending and revenues in the system making a distinction between the general regime and special regimes, the latter treated as a whole, while taking into account the types of benefits and breaking data down by sex and age. This projection facilitates the evaluation of a series of possible pension reform measures in which consideration is given to maturation time, long-term effects, groups affected and the sacrifice such measures would mean for individuals making up those groups. Furthermore, an analysis is also made of the sensitivity of the pension system to alternative scenarios for processes of job creation in the economy.

In the sociological exercise the study examines the positions of a series of key players in the debate and the decision taking on pension reform beginning with a discussion of the positions of the political parties in relation to the Toledo Pact treated as a possible point of departure for a reform process. Latter on, the study analyzes the background and arguments put forward by a series of strategic players (political, social, economic and cultural). Finally, it sets out the results of a public opinion survey using a representative sample of the Spanish population carried out in April 1995 through which it examines Spaniards' perception of the problem and their opinion about various possible solutions.