| Author (Person) | Bower, Helen |
|---|---|
| Publisher | ProQuest Information and Learning |
| Series Title | In Focus |
| Series Details | 18.12.02 |
| Publication Date | 18/12/2002 |
| Content Type | News, Overview, Topic Guide | In Focus |
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The first EU level report on the pension system in EU Member States, adopted by European Commission on 17 December 2002, highlights the need for further reforms in order to guarantee adequate and sustainable pensions in an ageing society. The report warns that as the 'baby boom' generations of the 1950s and 1960s reach retirement age within the next 10-15 years the pressure on public finances will increase, exacerbated by the fact that birth rates over the last two decades have been relatively low and life expectancy continues to rise. Analysts have forecast that this combination of factors will necessitate a 33% increase in Member States governments' expenditure to over 13% of GDP by 2050 since the ratio of working aged people to those over 65 is expected to fall from 4:1 today to 2:1 by the middle of the century. France is expected to be most affected by the changing pensions due to its lower than average statutory retirement age of 60 and the fact that most pensions are funded by the state. Its neighbours in Germany, Spain and Italy will also need to accelerate the implementation of reforms if they are to avert a crisis. According to the report the United Kingdom, on the other hand, which relies heavily on a private based pensions system will not experience problems relating to the funding of pensions but analysts suggest that it is unclear whether the UK system would provide adequate income for all pensioners in the future. Although pensions systems are the competence of Member States, the promotion of a high level of social protection is listed as one of the EU's tasks in Article 2 of the EC treaty. Therefore, the European Council agreed at its Spring summit in Lisbon in March 2000 to prepare a Communication on the future evolution of social protection with a particular focus on the sustainability of pensions systems up to 2020. At the Laeken European Council in December 2001, Member States agreed to submit reports to the European Commission on how they intended to ensure that future generations of pensioners would be adequately provided for without burdening future generations of workers. The 'national' strategy reports were received by the European Commission in September 2002 and helped to form the basis of the EU level report. Suggestions included in the report for further reforms, such as the increased use of private pensions, are aimed at helping all the EU Member States to achieve the eleven common objectives they agreed in 2001, which are as follows:
In a response to the changing working environment, the report also proposes that Member States should ensure that reform of pensions systems reflects the increasing participation of women in the labour market and the growing number of part-time, self-employed and temporary workers. Moreover, if the target set at the Barcelona European Council in 2001 of raising the average age of withdrawal from the labour market by five years by the year 2010 is to be achieved then employment incentives in pension schemes need to be strengthened and the employment prospects for older workers need to be improved. The report will now be examined by the Council before being submitted, as a joint Commission and Council report, to the Spring European Council in Brussels on 21 March 2003. Helen Bower The first EU level report on the pension system in EU Member States, adopted by European Commission on 17 December 2002, highlights the need for further reforms in order to guarantee adequate and sustainable pensions in an ageing society. |
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| Subject Categories | Employment and Social Affairs |
