Toledo Pact
The Toledo Pact (
Background
In June 1993, the
Measures
The package of measures involved both structural and management changes, including separation of contributary and non-contributary benefits, leaving the social security funding only contributory benefits while non-contributory benefits were to be financed from general taxation.
A significant reform was the creation of a reserve fund, to be financed by surpluses of contributions over costs during periods of strong economic growth and to be used during periods of recession.
The reform also involved a simplification of the numerous special conditions for different categories of workers and unified the contribution levels and ceilings.
Changes were made to improve efficiency and fraud prevention, and an effort was made to encourage employment in labour-intensive industries as well as those requiring highly qualified employees, by reducing contributions. In addition, while maintaining the retirement age at 65 years, those wishing to carry on working beyond 65 would be encouraged by the social security system.
Finally, a permanent parliamentary commission was created in order to monitor and modernise the pact and the system.
References
- ^ (in Spanish)Boletín Oficial de las Cortes Generales, Congreso de los Diputados, 12 de abril de 1995. Número 134