Social protection/social security aspects of active ageing MISSOC NETWORK MEETING Copenhagen, 24 & 25 May 2012 Social protection/social security aspects of active ageing Prof. Jean-Philippe Lhernould (Univ. Poitiers) Academic Expert

Objectives and scope of the report 2012: “European Year for Active Ageing and Solidarity between Generations” Contribution to reflections on active ageing …What is “active ageing”? process of optimising opportunities for health, participation and security in order to enhance quality of life as people age includes the notion of continuing activity in the labour force and encompasses continuing participation of older people in society (WHO) = promotion of the employment of older workers growing old in good health and as a full member of society, feeling more fulfilled in our jobs, more independent in our daily lives and more involved as citizens (EU)

Objectives, scope and challenges of the report What is a “senior”, an “old(er) person/worker”? No clear-cut definition: depends on countries and policies active ageing policies may start at age 50 or age 65 active ageing policies may apply to persons within a variable age bracket (ie. 55-64)

Objectives, scope and challenges of the report Active ageing, a multidimensional approach sum of policies relating to “employability” (vocational training, career advice, retraining, literacy skills, medical psychological assistance, etc.) measures in the field of social integration provision of social security/tax cash benefits/advantages

Objectives, scope and challenges of the report “Social protection” national policies contribute to active ageing in variable ways taking into account financial and demographic matters, unemployment rate, gender equality policies, public health goals, social inclusion, structure of labour markets and of social protection systems, Cultural/awareness aspects, level of economic development

Objectives, scope and challenges of the report Report tries to assess links between active ageing policies and social protection in EU Analysis of social protection systems which objectives or effects are to maintain at work older people who are already active; to facilitate back-to-work of older people who are excluded from the labour force, whether for a long or a short time

Objectives, scope and challenges of the report Report examine measures for older workers which combat forms of early retirement, support deferred pension, extend pensionable age and/or make it flexible facilitate back to work of jobless older people, allow for partial pensions and accumulation of pensions with earnings from work adapt unemployment/invalidity and social assistance benefits to encourage work of older people

Objectives, scope and challenges of the report Report does not examine measures for older workers which Advantages to employers such as social security/tax exemptions or partial payment of salaries by public institutions, Not enough data Preventive measures aimed to protect the good health of workers Link not direct enough

1. Rise of the statutory average pensionable age Variety of reforms increasing statutory pensionable age Progressive increase in most countries Pensionable age increase may not be identical for all insured persons of the same country Family situation, birth year, insurance date, etc. Parallel process of equalising pensionable age between genders Abolition of statutory retirement age

2. Rise of the effective pensionable age Rules of entitlement/calculation extension of years of contribution tougher access to a full pension switch from defined benefit to other types of pension funds increase of the reference period over which salaries are taken into account longer minimum periods of insurance flexible system of pensionable age Extra advantages for deferred pensions bonus to late pensioners removal of penalties applicable to workers who would have not been entitled to a full pension

3. Accumulation of job income and old-age pension Partial retirement not high on the agenda: 21 countries do not specify any partial retirement rules broad scope of potential beneficiaries significant reduction of the working time may be required target group may be defined Partial retirement may be open only to unemployed persons who take up a job or to persons who conclude a fixed-term contract system of advanced pension

3. Accumulation of job income and old-age pension Growing awareness in European countries: possible in a vast majority of them A significant group of countries (at least 14) provide for an unlimited accumulation of job income and old-age pension Many countries have made the accumulation gradually easier Pension may increase during the period of accumulation When accumulation is limited Based on total income received, Temporal elements (age, job taken up)

4. Phasing out of early retirement schemes A minority of countries have banned all forms of early retirement Many countries exclude the right to retire for persons who are younger than an age ceiling Variable age: gender, family status, health state, insurance record…

5. Reduced scope of remaining early retirement schemes Tighter conditions of access Subject to a very long career Time gap between early retirement and statutory retirement can be small Provided if minimum pension amount reached Limited to some persons persons who have been unemployed for a certain period of time, disabled, persons with low income, persons wrongfully imprisoned…

5. Reduced scope of remaining early retirement schemes Less attractive benefits Early pensions may still not subject to financial penalties May be limited to specific situations: disabled persons, persons having raised children… Half of the countries include financial penalties pension cut proportionately to the length of anticipation reduction rate dependent on the career record reduction calculated according to the age reduction rate based on toughness of activity

6. Alternative policies for stay at work/ return to work of older people Most active ageing policies in the field of social security concern the old-age risk (including widowhood) Alternative actions may be built up in the context of unemployment & invalidity risks + social assistance

Reduced working capacities: rehabilitation measures 6. Alternative policies for stay at work/ return to work of older people Reduced working capacities: rehabilitation measures Broad measures medical, social, educational, psychological, vocational training measures rehabilitation not reserved to victims of accident at work or occupational diseases (extra) daily cash benefit during the rehabilitation period doctors and other experts play a key role decision to provide rehabilitation services, power to assess the degree of health damage… “Rehabilitation before pensions” Access to invalidity/incapacity pension may be conditional upon completion of retraining / rehabilitation measures

6. Alternative policies for stay at work/ return to work of older people Reduced working capacities: accumulation of incapacity/invalidity benefits with earnings from work Since 2004, slight trend for a wider possibility of accumulation Group1: some countries which allow for unlimited accumulation of these two sources of income Group2: some countries which do not allow the accumulation at all. Group3: most countries subject accumulation to conditions and limits based on a maximum overall income based on the degree of work incapacity

Return to work of older unemployed (with full working capacities) 7. Alternative policies for stay at work/ return to work of older people Return to work of older unemployed (with full working capacities) Countries were tempted to exclude from the labour market older workers by granting “transitory” unemployment-related benefits allowing them to wait until they reach the pensionable age Some countries still provide extended unemployment benefits continuity of unemployment benefits through social assistance measures However, 12 countries report no specific measure for older unemployed persons

Social assistance and older unemployed workers 7. Alternative policies for stay at work/ return to work of older people Social assistance and older unemployed workers A minority of countries consider that older workers should not be treated like other workers concerning the work research/activation measures Some countries consider that older workers may be subject to less stringent requirements Some countries gradually remove exemptions applicable to older workers In most cases, no specific rule for older unemployed persons are required

Social protection contribute significantly to active ageing Conclusion Social protection contribute significantly to active ageing Lower statutory age /tougher access to a decent pension play a huge part Phasing out of early retirement schemes as well as tougher access to extended unemployment benefits follows the same trend

More innovative policies Conclusion More innovative policies accumulation of an old-age/invalidity/incapacity pension and job income are well accepted deferment of pension after statutory retirement age is adopted by most countries Emphasisis on preventive measures such as rehabilitation policies