Page 77 - Economic report 2020

The deficit in the general branch
decreases, while the surplus in the CASS REVENUE AND EXPENDITURE BY Chart 8.11
BRANCHES. 2022 (millions of euros)
pension branch increases.

This imbalance in the general branch is financed
by contributions from the Government budget
(for €32.1 million), according to the provisions
of Article 86.2f of the recast Law 17/2018, on
social security. This situation has been repeated
since 2012, after the cumulative reserves
of this branch were depleted in 2011. The
prospects of a progressively aging population Revenue
and growth in chronic diseases would indicate Expenditure
that health costs will continue to rise, making Note: Data relating to revenue from contributions and expenditure on benefits.
it difficult to restore financial equilibrium if Source: CASS (Andorran Social Security System).
the current conditions for contributions and
coverage are maintained.

3.4. Pension branch of the CASS

Revenue from contributions in the pension branch saw an extraordinary increase of 13.7% in
2022, to €161.8 million, the highest level in the available series. In parallel, the upward trend
in expenditure on benefits accelerated, with an increase of 10.7%, bringing the total to €134.9 75
million. As a result, the surplus in this branch increased to €31.9 million.

Any surplus from contributions produced in the pensions branch of the CASS is paid into the pension
reserve fund, created in 2015 for management and financial efficiency, with the sole purpose of
covering the future pensions of people who have contributed to the CASS. At the end of 2022, the
fund’s reserves were €1,472.5 million, 7.1% less than in the previous year, a variation that includes
the contribution from the CASS and the return obtained from management of the fund.

The rise in expenditure on benefits in 2022 can partly be explained by a 5.5% increase in the number
of retirement pensions (compared with +5.9% in 2021), reaching a total of 14,087 in December,
compared with 13,350 in the previous year. In
parallel, the number of pensioners with higher The number of pensioners
contributions and a longer time in the system is increased 5.5% to 14,087.
increasing progressively, as the pension system
matures. On the other hand, the dependency
ratio (active/passive ratio) reached 3.38 in December 2022, representing an improvement from
the 3.33 recorded one year earlier, due to the economic recovery and increase in active population.

Finally, a study of the pensions system commissioned by the CASS and prepared in 2021, with
data at the end of 2020, concludes that there are insufficient funds in the pension branch for Andorran economy: general developments | VIII. Public sector
2024. As soon as the technical balance of the pension branch becomes negative, the government
will have to start to finance the deficit and use the reserves, which would run out in 2039.

In addition, on 8 March 2022, the proposals agreed by the Board of Directors of the CASS were
published on the institutional website, summarised in a document titled “14 Measures for the
Integral and Coherent Reform of Pensions in Andorra” and detailed in the box below.