Implications of Demographic Changes on Public Sector Pensions 42nd Meeting of the DGs Responsible for Public Administration in the EU - 27 May 2004 - Dublin Castle Implications of Demographic Changes on Public Sector Pensions Roger Hessel - Lecturer r.hessel@eipa-it.com European Training Centre for Social Affairs and Public Health Care CEFASS - Milan (I) Europan Institute of Public Administration EIPA - Maastricht (NL)

   

Diversity of Pension Schemes 10 20 30 40 50 60 70 80 90 100 ES DE FR IT NL GB 1st Pillar - State Pensions 3rd Pillar - Private Pensions 2nd Pillar - Occupational Pensions

Main Outcome of the Survey 42nd Meeting of the DGs Responsible for Public Administration in the EU - 27 May 2004 - Dublin Castle Main Outcome of the Survey Raise of the employment rate = most promising reform instrument Retirement age over 65: FIN, D, IRE, SW, E, UK Greatest HR challenge = Performance-related salaries: D, I, LAT, P, E EIPA-CEFASS Report = 60 pages 23 replies from MS Lack of response / data due to: Only 23 MS missing MS: EE + Slovakia - political reasons: explosive topic, reforms on the way - long ‘information ways’ betw ministries Peer pressure; ‘naming and shaming’ at Meeting in Dublin on 27 May However: NO ranking in pension matters Retire Age > 65: 6 countries FIN = 68, SW = 67, E = 70, UK > 70 (65 for all new civil servants starting from 2006), IRE = only partly (not publ service), D discussed ! Impact of demographic change on continental Welfare States (with strong 1st pill) stronger than on on countries with strong funded pension schemes ! ‘2nd pill Countries’ --> advantage regarding future reforms

Outcome of the Survey (2) 42nd Meeting of the DGs Responsible for Public Administration in the EU - 27 May 2004 - Dublin Castle Outcome of the Survey (2) Gradual retirement schemes in: DK, FIN, D, I, L, NL, PL, SLO, SW, UK ‘Good practice’: Age Diversity in UK Pensions calculated on lifetime: DK, FIN, I, LAT, LIT, L, M, NL, PL, P, SW Education programmes needed to combat financial illiteracy ‘Gradual retire schemes’ = combine partial pens with part-time work; research found several disadvantages (-) of an abrupt, ‘cliff-edge’ transition into retire: ‘phased, progressive, flexible retire transition has following (+) : higher job satisfact, lower stress, lower absence rate, higher ‘retention rate’; --> ‘ease out’ Good practics UK ‘Age Diversity (+DK): Min of State for Pens ‘Ageism’ costs 23-45 bio EUR Ageism in our workplace culture cast shadow on HR policy; Some of You from public admin = Big Employers Age: no matter at work (but skills, abilities) Use Human Capital regarding both older + youngr workers UK: legislation in 2006 BUT ? Will legislat change attitudes/culture? UK: Code of Practices “New Deal 50+”: 2.200 Euro for recruitm > 50 y Raise in pressure on public finance --> Families become more important 2 Changes: 1. Female employment 2. New family structures Good practices: Family policy in France: 80% of women have 2 kids, 1.9 babies on average Success story is due to: 1. widespread availability of child care facilities (crèche), 2. Access to materniy / parental leave for up to 3 y, 3. Long-term advantage of tax benefits for working mothers with kids > 3 y At origine of success story --> defeat: de Gaule in 1940 “ Trop peu d’alliés, trop peu d’armes, trop peu d’enfants ”

Age-Based Distribution of Activities Vertical distribution Education and Training Work Age Time Returement Family, Leisure, Community Work Education and Training Age Time Horizontal distribution G. Reday-Mulvey, Geneva Association, 1999