Although Member States have the primary responsibility for designing their pension systems, major demographic changes along with strong economic shocks make the case for updating the European Union’s role as regards pensions.
The European Commission’s 2012 White Paper on pensions has been fundamental to this process. Describing how the European Union (EU) could best help Member States to provide pensions for an ageing population, it emphasises the need to address the objectives of adequacy, safety and sustainability together. It is plainly in line with the ‘European Semester’, the recently introduced process for monitoring economic policies and coordinating structural reforms in Member States.
Via the White Paper and the new policy coordination mechanism, two major policy orientations have emerged: balancing time spent in work and retirement, and reducing the gender “pension gap”. At the same time, securing both the safety and the sustainability of pensions are at the forefront of the European Union’s agenda. In the context of free movement of persons, pension rights need to be secured to protect EU citizens from insufficient financial governance or accountability, in particular in respect of occupational pension funds. Complementary retirement savings might also be supported at European level in order to ensure sufficient pensions for the coming generations.
This EU policy has given rise to extensive debate amongst stakeholders covering the issues of active ageing, gender gap, subsidiarity principle, financial sustainability, mobility of workers, etc. Nevertheless, broad consensus has arisen that in-depth reform of the retirement systems is needed everywhere in the EU.