Social security account balances are dangerously close to being in the red. The first symptom of struggle was noticed at the end of 2010 when it was confirmed that the Reserve Fund's interest payments would have to protect the system from running at a deficit. With the aid, Social Security's resulting budget surplus rose to over 2.38 billion euros, and yields on pension fund savings rose to 2.6 million. It was made known in July for the first time that earnings on social security contribution deposits were not sufficient for paying out pensions, so companies' payment defaults and contracting employment eroded the social security fund balances.
Even though Salgado confirmed that there would be a surplus equaling 0.4% of the GDP (4 billion euros) in 2011, predictions about employment levels were too high, and thus it seems difficult for us to end the year with that surplus.
Because the Secretary of State of Social Security, Octavio Granado, already saw that the figures would not square, Granado has been forced to take urgent measures such as investing 6 billion euros in short-term national debt that will be kept in savings.
This has never been done, and it could help to meet the Spanish Treasury's financing needs.
Where did this money come from? Well, from surpluses from previous years that were not deposited in the Reserve Fund. Granado supported separating these funds in order to grant deferrals or postponements to companies paying Social Security. But as much as they are denying it, their efforts could make it even harder for the state to meet its deficit goal.