Articles - EU sets plans for adequate, safe and sustainable pensions

 Pensions are the main income source for around a quarter of the EU's population today and younger Europeans will also come to rely on pensions later in their lives. Unless Europe delivers on decent pensions now and in the future, millions will face poverty in old age. Europe is also ageing as people live longer and have fewer children. From next year, the EU's working population will already start to shrink. Pensions are putting increased financial pressure on national budgets, especially with the added strain of the financial and economic crisis. To support these efforts, the European Commission has published a White Paper on adequate, safe and sustainable pensions. It looks at how the EU and the Member States can work to tackle the major challenges that confront our pension systems. It puts forward a range of initiatives to help create the right conditions so that those who are able can continue working - leading to a better balance between time in work and time in retirement; to ensure people who move to another country can keep their pension rights; to help people save more and ensure that pension promises are kept and people get what they expect in retirement.

 Presenting the White Paper to the press in Brussels, Commissioner László Andor, EU Commissioner for Employment, Social Affairs and Inclusion, said: "Ensuring adequate pensions for the future is possible if we follow through on our commitments to reform. The impact of ageing is upon us - the baby-boomers are retiring and fewer youngsters are entering the labour market. But it isn't too late to meet these challenges”. The Commissioner added that raising retirement ages was important saying that a recent Eurobarometer survey shows many Europeans would stay in the labour market even beyond their pension age if the conditions are right.

 Coinciding with the 2012 European Year for Active Ageing and Intergenerational Solidarity, the White Paper builds on the results of a wide consultation, launched in July 2010. It cuts across different policy areas and is fully in line with the Commission's 2012 Annual Growth Survey. The measures at European level will support and complement national pension reforms. 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.


 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).

 Dowload the whitepaper below:


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