The retirement of the baby boomer generation: an opportunity

Abstract

Is the retirement of the baby boomer generation a cause for alarm? What is the true scope of this phenomenon?

These questions, and the other challenges faced by the Public Social Security System, leave no doubt that the retirement of the baby boomer generation, coupled with the demographic effect and the income deficit facing the System, will be the cause of some financial tension.

The general alarm seen in its greatest forms in the United States, Canada, Australia and Norway is far from the reality in Europe, and Spain in particular. This article will analyse the causes of the phenomenon, by comparing various European countries, as well as the repercussions of the demographic effect on the sustainability of pensions. Law 23/2013, of 23 December, regulating the Sustainability Factor and the Revaluation Index of the Social Security Pension System, introduced automatic mechanisms, under the cover of the reforms carried out by different countries of the European Union, causing unprecedented legal friction within our System.

In short, the retirement of the baby boomer generation represents a challenge for our Public Pension System, especially due to the confluence of various situations, such as the so-called Revolution 4.0, the structural change of the population pyramid or, the much-feared low business cycles. The legislator must adjust our System to adapt it to these new necessities.