Pensions schemes and projection models in EU-25 Member States

This paper reviews the public pension schemes and the pension models used for the projections carried out by the Economic Policy Committee and the European Commission on age-related expenditure in 2005. The pension schemes are described as they were in force in 2005, including the effects of pension reforms enacted by mid-2005 even though the implementation of reforms would occur over a longer period of time. This reflects the practice applied in the projections as to what was included in the projections. While the pension expenditure projections covered apart from public pensions also statutory private funded pensions and in some countries occupational pensions, the paper focuses primarily on public pension schemes. These constitute the predominant part of pension expenditure in almost all Member States and they were the primary target of the exercise.

While a great deal of the projection exercise was done in a centralised way, notably population, labour force and macroeconomic projections, pension expenditure were projected by national authorities by using their national models in order to benefit of the country-specific knowledge on greatly differing pension systems and to improve the accuracy of the projections for pensions. This paper aims at contributing to the comparability of the pension projections across Member States and to make the projections transparent and better understandable through country-specific descriptions of the pension systems and the models used for the projection exercise.