Pension reforms and participation in Spain

The Spanish public pension system has periodically been reformed over the past three decades. These reforms have been of varying intensity and different in nature as regards their approval process. The first major reforms occurred in Spain in the 1980s and were characterised by their unilaterality due to the parliamentary majority of the government. They triggered a strong social response and various general strikes were called against their measures.  However, these reforms became more participatory by the mid-1990s. The main instrument of participation in pension reforms in the Spanish system is known as the Toledo Pact (Pacto de Toledo), which has been in force since 1995. It is a parliamentary commission that approves a series of declarative principles and recommendations to follow in the reform processes. Its purpose is to ensure broad political consensus before passing new regulations. Within this framework, another instrument used is social dialogue among government, unions and business organisations. Accordingly, there have been four agreements (1996, 2001, 2006 and 2011) approving a series of reform measures founded on the principles formulated in the Pact. On the basis of these agreements, the government in each case presented a bill to the Parliament for discussion and approval. The last reform, which took place in 2013, was very significant due to a huge regression in terms of protection levels. Unlike prior reforms, it was passed without social dialogue and without following the consensus procedures of the Toledo Pact, thereby implying a return to unilaterality in this field. The purpose of this paper is to analyse the functioning and consequences of these instruments of participation, focusing on explaining the Toledo Pact, how it works and how it has served to increase legitimacy and consensus in pension reforms as opposed to unilateral regulatory changes.