Demòcrates propose CASS-linked second pillar to reform pensions

Demòcrates per Andorra has endorsed the creation of complementary pension plans as a central element of a broader reform aimed at ensuring the system’s long‑term sustainability, particularly for younger generations. The party’s recently approved position paper promotes a second pension pillar based on individual capitalization that would operate alongside the current pay‑as‑you‑go model run by the Caixa Andorrana de Seguretat Social (CASS).

A key proposal is that the complementary plans be placed under the umbrella of CASS: workers’ contributions would build up individual accounts in their name, managed according to investment mandates tied to each person’s profile (age, risk preference, income level, etc.). While the default framework would keep the scheme within Social Security, the paper allows for some assets to be managed externally by private entities, similar to the existing reserve fund model, and stresses the need for specialist investment management.

The position paper, advanced by the party’s youth section and presented at the Demòcrates congress by communications secretary Manel Amorín, frames the second pillar as a structural response rather than a parametric tweak. Demòcrates argue that changing parameters such as retirement age or contribution levels only postpones the problem, whereas a mixed model — combining redistribution and individual capitalization — would better guarantee sustainability over the long term. The party says the pay‑as‑you‑go component should be preserved for its redistributive role but should carry less weight in the overall system.

In addition to the second pillar proposal, the document sets out several parametric measures: raising the retirement age to 67, increasing contribution rates up to 17%, establishing minimum and maximum contribution and pension bases, and penalizing early retirement. The paper also recommends complementary measures such as retraining and upskilling programmes to help workers change sector late in their careers and reach the proposed retirement age, and it suggests exploring hybrid formulas to encourage longer working lives.

Demòcrates say participation in complementary plans would not be equivalent to forcing private bank products; rather, the intention is to house the scheme within Social Security while deciding the precise management arrangements later. The party emphasizes preserving solidarity and redistribution within pensions even as it shifts part of the system toward capitalization.

The proposal arrives as a parliamentary commission charged with pension reform moves toward a timetable: members have set a goal of producing a first draft of modifications within about a month. Demòcrates aim for a broadly agreed reform to be completed during the current legislature and stress the importance of consensus among parties.

Not all parties share the same approach. The Social Democratic Party (PS) has signalled strong reservations about introducing a private second pillar, describing such a change as a red line and preferring to focus on parametric adjustments within the existing public model. Other groups have called for thorough analysis of all options and warned that reaching a shared position will require time and negotiation.

Demòcrates maintain that the debate is ultimately technical — about figures and sustainability — rather than purely ideological, and that a combination of parametric and structural measures is needed to prevent a future imbalance in the pension system.