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László Andor, EU Commissioner for Employment, Social Affairs and Inclusion, presenting the White Paper on adequate, safe and sustainable pensions. Photo © European Union, 2012
epnn – The European Commission has presented a White Paper on “adequate, safe and sustainable” pensions.
The pensions systems are in the responsibility of the EU Member States. But the challenges and problems of those systems are related to the development of demography in Europe.
Pensions are today the main income source for around a quarter of the EU’s population. And the baby-boom generation reaches retirement age. From next year, the EU’s working population will already start to shrink.
“Therefore it is time in Europe to reflect how adequate, safe and sustainable pensions can be secured”, said EU Commissioner László Andor while presenting the paper to the press.
The White Paper proposes, in particular, to:
- Create better opportunities for older workers by calling on the social partners to adapt work place and labour market practices and by using the European Social Fund to bring older workers into work. Enabling people to work longer is a major focus of the European Year 2012 for Active Ageing and Solidarity between Generations;
- Develop complementary private retirement schemes by encouraging social partners to develop such schemes and encouraging Member States to optimise tax and other incentives;
- Enhance the safety of supplementary pension schemes, including through a revision of the directive on Institutions for Occupational Retirement Provision (IORP) and better information for consumers;
- Make supplementary pensions compatible with mobility, through legislation protecting the pension rights of mobile workers and by promoting the establishment of pension tracking services across the EU. This can provide citizens with information about pension entitlements and projections of their income after retirement.
- Encourage Member States to promote longer working lives, by linking retirement age with life expectancy, restricting access to early retirement and closing the pension gap between men and women.
- Continue to monitor the adequacy, sustainability and safety of pensions and support pension reforms in the Member States.
Interview
László Andor, EU Commissioner for Employment, Social Affairs and Inclusion
Material
PDF: The White Paper on Pensions
PDF: Eurobarometer on active ageing
Web: EC website on pensions – social affairs
Web: EC website on pensions – internal market
Web: EC website on pensions – economic affairs
Web: Video animation on pensions
Background
Pensioners represent a significant and fast-growing share of the EU population (120 million or 24%), particularly as the baby-boom cohorts reach retirement age and the number of prime working age falls. In 2008, there were four people of working age (15-64 years old) for every EU citizen aged 65 years or over. By 2060, that ratio will drop to two to one. The impact of demographic ageing is further aggravated by the economic crisis. Pensions represent already a very large share of public expenditure: 10% of GDP on average today, possibly rising to 12.5 % in 2060. But with spending on public pensions ranging from 6% of GDP in Ireland to 15% in Italy today, countries are in rather different situations although they face similar demographic challenges. While the crisis affects pay-as-you-go pension schemes through falling employment, and hence decreasing pension contributions, funded schemes are hit through falling asset values and reduced returns.
While pension systems are largely a competence of member states, the EU can help with legislation on the matters that affect the functioning of internal market, with financial support for helping older workers to stay on the labour market, policy coordination and mutual learning. The reforms of the pension systems are evaluated within the Europe 2020 strategy. In 2011, 16 member states received a country specific recommendation concerning pensions and a further 5 signed up to pension reforms as part of their Memoranda of Understanding (for more details, see annex 3 of the White paper).
epnn with material from the European Commission
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epnn is the European Protestant News Network. It covers the news stories of the Protestant Churches in Europe. epnn_brussels provides regular updates from the European Institutions, covering stories of interest for the Churches in Europe. epnn_brussels: Frank Dieter Fischbach, Commission for Church and Society, Conference of European Churches CEC / Community of Protestant Churches in Europe CPCE.
epnn and epnn_brussels releases (marked with the respective tag) run under the Creative Commons license Attribution-NonCommercial-ShareAlike 3.0 Unported (CC BY-NC-SA 3.0). Source: European Protestant News Network EPNN, www.protestantnews.eu
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