Andorra Pension Chief Warns Against Repeated Parametric Reforms Eroding Trust

Jordi Cinca, president of the management committee for Andorra's Retirement Reserve Fund, has cautioned that repeatedly implementing parametric pension reforms risks eroding public trust in the system.

Speaking in Andorra la Vella, Cinca acknowledged that such adjustments—such as changes to retirement age or contribution rates—can provide short-term relief but fail to address underlying issues. They merely postpone challenges, he said, likening them to a forward pass in rugby that gains ground without securing victory.

The fund has delivered strong results in recent years, with three particularly successful fiscal periods and cumulative growth exceeding 24%. Despite this, Cinca stressed that these returns alone cannot meet future obligations to contributors, which will begin emerging in five, ten, or twenty years. "The key is long-term trends, but that does not remove the need for reform," he stated.

Cinca advocated for a comprehensive structural overhaul of the system's core pillars as the optimal solution. If political consensus limits options to parametric measures, however, he views them as preferable to inaction. The danger arises from chaining multiple such reforms in quick succession, which could leave citizens disillusioned. "People must understand that a purely parametric reform does not end the discussion," he warned, emphasising transparency to prevent frustration.

To maintain credibility, any parametric changes should buy time for broader reforms rather than becoming a cycle, Cinca said. Their effectiveness will hinge on the measures' scope, particularly the conversion factor, which he described as the most critical parameter. Raising contributions without adjusting it, he noted, would leave the system unchanged.