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Economic and Social Policies, PUBLICATIONS

Pensions: Balancing years in work and retirement, and private savings are key for the future

Image Copyright Gunnar Pippel, 2012. Used under licence from Shutterstock.com

On 16 February 2012, the European Commission published a white paper “An Agenda for Adequate, Safe and Sustainable Pensions“. It provides suggestions for reforming national pension systems. A strong focus is given to creating a balance between years in work and in retirement. The Commission puts forward several key measures:  

  • Live longer, work longer. By 2060, life expectancy will increase further. To keep a balance between pay and entitlements, retirement ages need to be raised.
  • Make working longer more attractive, for example through life-long learning, enhanced training, new approaches to “healthy ageing at work” and incentives for remaining in the job.  
  • Limiting early retirement schemes, which lead to high public expenditure and have no positive influence on employment levels of young people.
  • Equalising pensionable ages of men and women to close gender gaps in pension age, employment and pay.

Moreover, the Commission states that private pension savings are indispensable to secure retirement income. National authorities should therefore encourage and increase access to these and provide more information and protection for consumers. The Commission will support their efforts by collecting best practices and by offering financial support.

Decisions on reforms lie with the Member States. In response to the Commission’s 2010 green paper on pensions, several Member States emphasised that existing European policy frameworks on pensions should be strengthened instead of extended. Regarding the Commission’s position on increasing the effective retirement age, most Member States agree. The European Parliament called it a priority that employees work until pensionable age.

The question of what changes citizens are willing to bear in times of on-going austerity measures remains. Yet there seems to be great concern: A Eurobarometer survey from January 2010 showed that 57% of European citizens are not confident in the future of their pension – a clear alarm signal to policymakers.

About Verena Kern

Information Specialist for Employment & Social Affairs

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