As in many developed countries, population ageing is stressing the finances of the Spanish public pension system. Many studies have documented the sources of the increase in pension expenditures and the limitations of revenues from social security contributions to meet such an increase. Looking into the future, dependency ratios are expected to rise further, while, in the absence of additional changes to the system's sources of revenue, pension replacement rates will decline significantly from the current levels. In this context, this paper aims to contribute to the debate on the situation of the Spanish pension system through an analysis of its recent evolution and up-to-date forwardlooking projections that include the impact of the latest reforms. Finally, we also analyse alternative reforms that are needed to restore financial sustainability and improve equity, both within and across generations.

Key words: population ageing, pension systems.
JEL classification: H55.