ABSTRACT
This chapter presents the Spanish pension system as of 2010. After providing some evidence of the consensus of experts on the growing financial problems of the system, the author set out the landmarks of Spanish pension's policy since the 1980s. The chapter concentrates on the recent parametric reform of 2011, identifying continuities and discontinuities with previous reforms. It focuses on the challenges the Spanish pension system faces in coming years. The Social Security pension system, which amounted to 9 per cent of Spain's gross domestic product (GDP) in 2010, represents the largest social expenditure programme in Spain. The Spanish pension system rests on a public pillar and a private pillar. The 1987 Private Pensions Law defined pension plans as free and voluntary' and in any case' an alternative to the mandatory Social Security pension system. The Toledo Pact has not only framed but also locked in pension's policy since 1995 and for most of the first decade of the twenty-first century.
