The benefits for permanent disability and survivor rights, among them widow's pensions, are the contingencies of the Spanish public system where the greatest differences are observed between the capital actually contributed by workers and the actuarial cost of the benefits finally paid.
This is the main conclusion of the study "NDC Benchmarking of Spanish Pensions: Disability, Survivor Reversibility and Hidden Redistribution," prepared by Ahmed Ación López (University of Cassino and Southern Lazio) and Carlos Vidal-Meliá (Universitat de València and member of Patrimonium), and disseminated this Wednesday by the Foundation for Applied Economic Studies (Fedea).
The document shows that focusing solely on ordinary retirement offers a partial image of the commitments of Social Security. By incorporating disability and widowhood into the analysis, it is found that, for the 2023 cohort, the actuarial cost far exceeds the reconstructed contributory capital.
Thus, in the scenario without survivorship, the median value received ratio (MWR) for women in disability was 3.477 (compared to 1.710 recorded in retirement) and 2.109 for men (compared to 1.280 in retirement), indicating that the value of the benefit received greatly multiplies the capital contributed.
In monetary terms, the difference between the actuarial cost and the reconstructed capital in permanent disability reaches a median of 188,825 euros for women and 131,441 euros for men in the 2023 cohort. These amounts clearly exceed the discrepancies observed in ordinary retirement (103,573 euros for women and 50,092 euros for men).
According to the authors, this behavior responds to a lower accumulation of contributions throughout the work trajectory, to the granting of the benefit at younger ages, and to the high protective intensity of disability coverage, even after adjusting mortality by degree of disability.
The role of survivorship in actuarial balance
Regarding survivor rights, the report details that they act as an element that significantly modifies the diagnosis of the system in two ways. On the income side, when the fraction of the contribution intended to cover survivorship is incorporated, the notional capital recognized increases and the initial gap narrows.
On the spending side, if there is a beneficiary of the reversible pension, the total actuarial value of the benefit increases.
The study illustrates this double effect in the case of retired men in 2023. If the contribution for survivor benefits is allocated without assigning a beneficiary spouse, the median accumulated capital goes from 190,310 to 232,499 euros, which reduces the MWR from 1.280 to 1.048, approaching actuarial balance. However, when adding the calculation of a widow's pension of 52%, the indicator rises again to 1.267.
The researchers warn of the relevance of not analyzing widowhood in isolation to avoid erroneous conclusions about the sustainability of the system.
To quantify these effects, the work constructs a counterfactual based on notional defined contribution (NDC) accounts from 31,382 administrative records of the Continuous Sample of Working Lives (4,659 retirements and 26,723 disabilities).
Nevertheless, the authors emphasize that the NDC scheme is not proposed as a substitute for the current Spanish defined benefit model, but as an analytical tool that allows separating which part of the pension is supported by the contributions made, which component responds to insurance against contingencies, and where the implicit redistribution is concentrated.
The report also clarifies that showing a high MWR or internal rate of return (IRR) - like the 15.39% reached in female disability in 2023 - does not necessarily mean receiving a higher monthly pension.
Short or intermittent work careers and early pensions due to disability tend to generate high actuarial returns because they start from a reduced contributed capital, so these indicators highlight implicit transfers without assessing the sufficiency of the benefit or the level of protection against poverty.
Proposals and international references
The analysis takes the Italian pension system as an institutional reference to show that, even in models based on notional accounts, the contingencies of disability and survivorship require specific rules for financing, mortality, and redistribution that are not automatically resolved by applying the logic of retirement.
In light of these results, three orientations are proposed for the Spanish system: jointly evaluate retirement, disability, and survival to not leave out relevant obligations; explicitly differentiate the direct contributory rights of the insurance components and social transfers (minimums, widowhood, or care), and use the NDC as a measurement and diagnostic tool to locate the origin of financial commitments, without turning it into a closed reform proposal.
The study specifies that the figures presented refer to individual medians and do not constitute an estimate of the total debt of Social Security.