The pension ‘piggy bank’ will increase in 2025 to exceed 14,000 million, but Social Security remains in deficit

The Social Security Reserve Fund—popularly known as the pension ‘piggy bank’— It will close 2025 with revenues exceeding 14,000 million euros. This was announced this Wednesday by the Ministry of Inclusion, Social Security and Migration. The pension ‘piggy bank’, designed as a guarantee against situations of tension in Social Security accounts such as the one expected in the coming years, will end with its highest level of income since 2017according to the ministry.

The latest data in the possession of the organization They place the reserves at 13,684 million euros, after this year grants worth 3,970 million euros have been received. These funds come from the so-called intergenerational equity mechanism (MEI), an extra contribution that does not generate rights to a higher pension and was introduced by former Minister Escrivá’s pension reform to reinforce the system’s income.

In 2025, the MEI has accounted for 0.8% of the contribution base (a concept similar to salary), but that percentage will continue to increase progressively until reaching 1.2% in 2029. Next year, the MEI will rise to 0.9%, of which 0.75% will be borne by the company and 0.15% by the worker.

In addition to the MEI contributions, The fund has generated returns of 319.1 million euros coming almost entirely from investments in Spanish public debt that are made from the ‘piggy bank’. Finally, the mutual collaborators of Social Security contributed 17.75 million, which generates a total balance of 4,307 million so far this year.

A piggy bank that was emptied

The reform that Escrivá introduced seeks refill the battered reserve fundwhich was emptied after the serious economic crisis of 2008. The delicate situation of the country’s public finances made the Zapatero and Rajoy governments resort to the piggy bank to pay pensions, but also for other items such as active employment policies, which should be charged to the General State Budgets.

The former Minister of Social Security estimated at the time that with the over-quotation of the MEI the pension piggy bank will have received more than 40,000 million euros in 10 years. If in 2032 pension spending deviates from the thresholds agreed with the European Commission, the funds in the ‘piggy bank’ will be used to pay pensions with an annual limit.

Although the pension ‘piggy bank’ continues to fill up year after year, theSocial Security maintains an annual contributory deficit that far exceeds the amount of the reserve fund. The difference between what the organization earns through social contributions and what it then spends on contributory benefits (those that require having contributed to be able to receive) was around 60,000 million euros in 2024, according to Fedea.

That is to say, although Social Security is filling the piggy bank little by little and it gives the impression that there is a reserve for contingencies, The real deficit that the organization has each year is much higher than the content of that reserve fund. At the same time, most of the resources in the ‘piggy bank’ are dedicated to investing in public debt, so the reserve fund also serves to finance the public deficit.