BackTo enhance the pension system without placing an undue burden on the younger population, the Intergenerational Equity Mechanism (MEI) will be temporarily introduced on employees’ salaries. This mechanism will account for 0.6% of the contribution base for common contingencies, with the company covering 0.5% and the worker covering 0.1%. For instance, in the scenario of a worker with a monthly salary of one thousand euros, the Government illustrates that only 1 euro would be deducted from their salary, while the remaining 5 euros would be covered by the company.
However, what is the direct impact on my role as an employee? The MEI comes in to replace the Sustainability Factor and will impact your contributions. In this context, it will not affect your expenses, nor will it take into consideration the increase in life expectancy, unlike the Sustainability Factor. Specifically, this measure will be in effect until 2032. At that time, achievements and compliance with the objectives will be evaluated, and based on those results, new proposals will be presented.
The funds collected will be directed to the Reserve Fund, activated in times of need. This measure, driven by the aging of the population, will probably be maintained until 2050 with adjustments.
For the self-employed, this tax will gradually be added to their monthly contribution, reaching €305 per month. The objective is to establish a minimum contribution by 2032 according to the new self-employed contribution structure between 2023 and 2031. In addition, for self-employed with employees, a 0.5% increase will be applied to the cost of each salary. For example, for a salary of €1,000 per month, the tax would be €5.
Royal Decree-Law 2/2023 establishes increases in the MEI until 2050, reaching 1.20 percentage points in the salary.
The MEI percentages for employer and employee are:
– 2023: 0.60% (0.50% employer, 0.10% employee).
– 2024: 0.70% (0.58% employer, 0.12% employee)
– 2025: 0.80% (0.67% employer, 0.13% employee)
– 2026: 0.90% (0.75% employer, 0.15% employee)
– 2027: 1% (0.83% employer, 0.17% employee)
– 2028: 1.10% (0.92% employer, 0.18% employee)
– 2029-2050: 1.20% (1% employer, 0.20% employee).
MEI appears under “deductions” in payroll, calculated based on contribution and other visible deductions.
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