More than 100,000 mutualist professionals, mainly lawyers, solicitors, and architects, will see their future pensions improved following the approval of a new law regulating their transition to the Social Security system. However, around 47,000 retired mutualists are excluded from the measure.
The Congress of Deputies has given the green light to a law that will allow over 100,000 active mutualists to enhance their future pensions by facilitating their integration into the Special Regime for Self-Employed Workers (RETA). The regulation, which has undergone numerous changes during its parliamentary processing, aims to resolve the historical problem faced by these professionals, who have paid into alternative mutualities for years with benefits lower than those of Social Security.
Alternative mutualists are professionals in law, solicitors, and architecture who, initially required to contribute to a mutuality, found that upon retirement their accumulated capital was very low. Although there was a legal possibility to contribute to Social Security, many did not transition to RETA because it meant losing their funds and the years contributed for pension purposes.
Under the slogan "1x1 Bridge for All", the group demanded a regulation that would allow the transfer of all their contributions to Social Security, counting 100% as contributions. The law approved this week takes a first step but does not fully satisfy anyone: it opens the bridge to all active mutualists but excludes retirees (except those receiving a retirement pension) and maintains the option of choosing between contributing to Social Security, a mutuality, or both.
Exchange of rights with a reducing coefficient
The law also establishes the exchange of accumulated economic rights in the mutuality by applying a reducing coefficient between 0.67 and 0.87 on the minimum contribution base that would have corresponded to the worker had they been registered in RETA. Each month contributed to the mutuality will count as a full month in RETA for mutualists aged 52 or older as of December 31, 2022.
However, subsequent regulatory development will determine the details of the exchange, creating uncertainty among those affected. The regulation initially only affected mutualists who had started making contributions before January 1, 2013, and who were contributing as of December 31, 2022, excluding those who already had 15 years of contributions or were recipients of a public or private pension.
After the changes, the final law expands the scope to all active mutualists but excludes about 47,000 retired mutualists, who will not see their pensions improved. This exclusion has been criticized by mutualist associations, who believe the law is insufficient.
What does it mean for active mutualists?
For professionals still active, the law represents an opportunity to improve their future pensions by being able to transfer their contributions to Social Security. However, the decision to maintain the option of choice means that each mutualist will have to assess whether it is worthwhile to change regimes or remain in the mutuality.
Experts recommend analysing each professional's particular situation, considering age, years contributed, and the capital accumulated in the mutuality. The application of the reducing coefficient on the minimum contribution base may result in a less favourable exchange than expected, making it crucial to wait for the regulatory development to know the exact details.
The law will come into effect in the coming months once published in the Official State Bulletin. The Government has a period of six months to approve the regulation that will develop the exchange of rights, a process that mutualists will closely monitor.
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