As international companies operating in Spain, staying updated on labor and fiscal regulations is crucial for ensuring compliance and maximizing benefits. In this article, we will explore the recent reforms regarding incentives for deferred retirement in Spain.
These incentives provide employees with the option to delay their retirement, offering a combination of increased pension benefits and a lump-sum payment.
Employing In Spain understands the importance of providing comprehensive assistance to international clients, and we are dedicated to offering expert guidance on labor and fiscal matters.
The Spanish Council of Ministers has recently approved a royal decree that finalizes the reform of incentives for deferred retirement, which was initiated in 2021.
The reform introduces a mixed formula that combines two existing benefit types for individuals voluntarily choosing to postpone their retirement.
The formula includes a percentage increase in pension and the provision of a lump-sum payment upon retirement.
Employees who opt for this new formula and delay their retirement between 2 and 10 years will receive a simultaneous increase of 2% in their pension for each year of delayed retirement.
Additionally, they will receive a lump-sum payment equivalent to half of what they would have received under the current lump-sum payment option.
For those who delay their retirement for 11 years or more, the incentive includes a lump-sum payment applied to a 5-year delayed period, along with a 2% increase in the pension for each year of delay.
The reform of incentives for deferred retirement has already shown positive results.
In 2022, the first year of implementation, the percentage of individuals choosing this option reached 5.4% of retirees. In the first quarter of 2023, this percentage further increased to 7.8%.
During 2023, 1,148 new pensioners (17% of pensions benefiting from some form of delay supplement, compared to 12% in the same period of 2022) have opted for the lump-sum payment, with an average amount of €13,100.
At Employing In Spain, we understand the significance of labor and fiscal regulations for both workers and companies in Spain.
We have a team of professionals ready to assist you in achieving your employment objectives and addressing any concerns related to labor and employment matters.
Contact us today to schedule an appointment and take advantage of our expertise.
We are committed to providing the best possible assistance for your business operations in Spain.
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