Spanish prime minister Jose Luis Rodriguez Zapatero said his country must overhaul its pension system, including raising the retirement age and changing the way payments are calculated.
In his annual state-of-the-nation address, Zapatero (pictured) said he wanted to raise the retirement age from 65 to 67 and would consider increasing the number of years of contributions used to calculate pensions, which could lead to lower average payouts.
Any changes must go through a cross-party parliamentary commission and Zapatero said he wanted to seek "consensus" on the move.
"We can't close our eyes; we have to adapt our pension system to demographic changes," Zapatero said. "We want to clear up as soon as possible the uncertainties about the sustainability of the system" and "strengthen the credibility of our public finances.
The Spanish government is trying to cut the euro region's third-largest budget deficit while returning the economy to growth after a two- year recession.
The Centre for Social Justice is calling for the state pension age to be raised to 70 by 2028 and to 75 by 2035, a much faster rise than currently planned.
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Jonathan Stapleton speaks to Punter Southall Governance Services director of outsourced pension services Clare Owen about the firm's latest reseach into the effectiveness of trustee boards.