Manuel Baganha knows well the Social Security Financial Stabilization Fund (FEFSS), known as the “pension cushion”, which has been used so many times in the Government’s rhetoric to testify to the effort to make the system sustainable. In 2024, this fund, created to guarantee the payment of pensions if the system that pays them goes bankrupt, will have new income, this time from the IRS. But although Manuel Baganha, who managed this “cushion” for 15 years, defends the diversification of his income as an unequivocal necessity, he criticizes the Government’s strategic option: instead of a handful of funds of little value (“alms”) he preferred to see fewer sources but greater amounts contributing to the Fund.
One of the ways he suggests would be to allocate a “significant amount” of VAT to the FEFSS. “There is an additional amount that reaches Social Security, not directly to FEFSS, which is a part of the VAT. Why does a significant amount of VAT revenue not affect the Fund? Financial Stabilization?” he asks.
In recent years, financing alternatives have been created that, in 2023, according to Government data, will place 600 million euros in the fund, less than half of the two billion euros with which the “cushion” was reinforced. For Manuel Baganha, limiting income sources to “two or three” large amounts would not only save administrative costs, but also better control whether the funds allocated to the Fund are actually delivered. In addition, it is necessary to ensure that existing income has the necessary stability. “By diversifying funding sources, we also we have to guarantee a certain stability in these incomes”, he argument.
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Source: Observadora
