Public Pension Reforms at the Crossroads - Financial Sustainability Vs Social Sustainability

European countries have progressively achieved very advanced pension systems in the latter part of the last century, which are a core component of the welfare state. However, a set of circumstances, including ageing population, the economic crisis or the spread of austerity policies, has recently pushed many of them to introduce regressive reforms to ensure pension sustainability. As the OECD (2015) has remarked: ‘[f]ixing the financial challenge of pay-as-you-go pension systems is only one part of the equation. The other part relates to social sustainability and whether pensions in the future will be sufficient to provide adequate living conditions for older people’. This is the case of Spain where such an instrumental economic approach aims at reducing public expenditure by tightening pension requirements and reducing its amounts. As a result, the protection levels of the Spanish public pension system are being eroded, raising doubts about the adequacy of pension and its ability to be a real instrument of protection and equality.

This paper argues that reforms should not be subjected to economic dictates. Policymakers need to explore alternative directions to effective guarantee an adequate public pension as a means to ensure human dignity and equality. Alternatives to ensure not only financial but also social sustainability will be proposed, taking the Spanish public pension reforms as a case study. To this extent, these latest amendments will be analysed, focusing on and its negative impact on citizens’ protection.