The Spanish pension system works, in theory, under a simple principle: the more you contribute during your working life, the greater the pension you have when you reach contribution. That’s the theory that works in most cases.
However, Alfonso Muñoz Cuenca, an official specializing in pensions, has published a video in which a paradox is revealed within a system that prioritizes the principle of solidarity, compared to that of contribution that should reward those who contribute the most with higher pensions.
The limits that change everything
The Order PJC/297/2026 which came into force in March 2026 has set the maximum contribution base to the General Regime sets in its article 2 at 5,101.20 euros per month for 2026.
In parallel, the maximum pension that a retiree can collect that same year is 3,359.60 euros. That is to say, between what a worker can contribute in his monthly contributions and what he can receive when he retires there is a difference of almost 1,742 euros per month.
Muñoz explains that the contributory principle applied by Social Security establishes a relationship of proportionality between what a person contributes to the system and what they receive as a benefit. Whoever contributes more, in terms of amount and duration, effectively tends to receive a higher pension.
However, the legal limit conditions the entire calculation, and this limit leads some contributors in the highest percentile to wonder if they are really interested in contributing for the maximum base. As the official himself points out, answering that question “is very complex and has many nuances.”
Everything is better understood with examples
To explain that contributing for the maximum base is not always “giving money away,” Muñoz explains three assumptions with different conditions that can occur throughout a working life. The expert points out that this career can be very stable and for many years in the highest range of contributions, but life is inexorable and there may be periods with lower salaries, intermittent unemployment, etc.
The first of the cases that Muñoz exposes is that of a retiring worker at 65 years old with 40 years of contributions, practically all of them contributing at the maximum of the contribution base. By law, that worker would be entitled to 100% of the regulatory base, which is equivalent to a theoretical pension of about 5,100 euros per month.
The problem is that, by applying the limit that the last legal reform, the worker “will be able to collect the maximum pension, which is 3,359.60 euros,” says Muñoz. That is, in this case, the case is observed an imbalance of almost 2,000 euros between the base for which you have contributed for a good part of your working life and the pension you receive when you retire.
The second assumption uses that same worker with 40 years of contributions, but in this case, he has had periods with lower salaries, part-time work, contribution gaps or years receiving unemployment benefits, contributing for the maximum base while he has been able to fulfills the function of a buffer for those ups and downs.
That is, it contributes to raising the regulatory base on which the pension is calculated because the periods with “excess” contributions compensate for those with “deficits.”
When contributing more does not pay off: early retirement
For the third assumption that the expert explained, which is the one that most highlights the anomaly that can most discourage those who contribute the most, Muñoz simulates the work life of two workers with different contribution files.
In the simulation of the first worker, an employee is shown who has accumulated 40 years of contributions with the maximum contribution base, and poses a early retirement at 63 years old. For retiring two years early, Social Security applies reducing coefficients (unless you belong to one of the exempt unions). In this case, a 19% reduction is applied, which would leave you with a theoretical pension of 4,132 euros.
However, when the maximum pension allowed is exceeded, these coefficients are not applied to the theoretical pension, but are applied directly to the established limit (3,359.60 euros), so the final pension would be about 2,721 euros. By applying the 20.42% personal income tax withholding that corresponds to the income, the resulting pension is 2,165.59 euros. That is, a difference of 2,935.61 euros with respect to the contribution base that you have been paying during your working life.
Worker two in this simulation, on the other hand, has only contributed part-time for 15 years and does so for a base of 1,100 euros per month. However, he retires at 65 and has a dependent spouse.
For your years of contributions, you are entitled to 50% of the regulatory base, that is, 550 euros. By not reaching the minimum pension, Social Security recognizes the corresponding supplements for receiving a retirement for below the minimum amount. so your resulting pension is 1,127 euros per monthand is not subject to personal income tax withholding.
The expert’s conclusions are devastating: “The first worker has contributed to the system for 40 years with very high contribution bases and does not receive even 50% of what he contributes.” On the other hand, the second, having contributed for only 15 years and for a much smaller amount, receives more than 100% of what he has contributed.
In Xataka | What is the regulatory base: how it is calculated in 2026 with examples
Image | Unsplash (Matt Bennett, Jordy Muñoz), Social Security
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