1. ESSPROS user presentation: Social Protection Committee
Rudi Van Dam - Vice-Chair Indicator Subgroup SPC
Marc Vothknecht - DG EMPL
19/11/2014
ESSPROS Conference

2. Table of content
ESSPROS and recent activity of the Social Protection Committee
Recent use/analysis of ESSPROS data by the SPC ISG and other SPC sub-groups: 1. social protection financing (ESSPROS data by scheme) 2. measuring early retirement (module on pension beneficiaries) 3. crisis monitoring (extension of ESSPROS to other beneficiaries)
Main demands for additional developments
19/11/2014
ESSPROS Conference

3. A. Introduction: The Social Protection Committee (SPC)
EU-Advisory Committee (art. 160 TFEU)
Monitoring social situation-discussion of social policies
Prepares council discussions on social policy and the European Semester
Produces opinions on the request of the Council, the Commission or at own initiative
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ESSPROS Conference

4. Use of ESSPROS in SPC work
A. Introduction (2)
Use of ESSPROS in SPC work
Indicators in Portfolio of EU-Social Indicators:
Total social protection expenditure (% of GDP)
Total current pension expenditure (% of GDP)
Analysis of ESSPROS data for possible use in recent work:
Efficiency and effectiveness of social spending and financing arrangements
Pension beneficiaries
Crisis monitoring: additional benefit recipients
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ESSPROS Conference

5. B. Use of ESSPROS data (1): social protection financing
Part of SPC report on financing, effectiveness and efficiency of social protection systems
Use of ESSPROS data on social protection receipts to describe financing arrangements
First use of ESSPROS scheme level information
Detailed information on scheme characteristics used for an analysis by policy area
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ESSPROS Conference

6. Social protection financing by policy area
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ESSPROS Conference

7. B. Use of ESSPROS data (1): social protection financing
Scope for further exploitation of scheme level data:
Separate analysis for public vs. private schemes
Time trends (longer time series)
Data by scheme not yet available for all Member States
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ESSPROS Conference

8. B. Use of ESSPROS data (2): module on pension beneficiaries
Data on the number of pension beneficiaries in the Member States, collected annually since 2006
Seven types of pensions are distinguished
19/11/2014
ESSPROS Conference

9. Description: periodic payments...
The module on pension beneficiaries
ESSPROS function
Category
Description: periodic payments...
Old age
Old-age pension
i) to maintain the income of the beneficiary after retirement from gainful employment at the legal/standard age or ii) support the income of elderly persons
Anticipated old age pension
to maintain the income of beneficiaries who retire before the legal/standard age as established in the relevant scheme
Partial retirement pension
of a portion of the full retirement pension to older workers who continue to work but reduce their working hours or whose income from a professional activity is below a set ceiling.
Survivors
Survivors’ pension
to people whose entitlement derives from their relationship with a deceased person protected by the scheme
Disability
Disability pension
to maintain or support the income of someone below the legal/standard retirement age who suffers from a disability which impairs his or her ability to work or earn beyond a minimum level
Early retirement (work capacity)
to older workers who retire before reaching the legal/standard retirement age as a result of reduced ability to work
Unemploy-ment
Early retirement (labour market reasons)
to older workers who retire before reaching the legal/standard retirement age due to unemployment or to job reduction caused by economic measures
The module on pension beneficiaries provides data on the number of pension beneficiaries in the Member States, and distinguishes seven types of pension:
There are three pension categories under the ESSPROS old age function: the 'classic' old age pension paid to beneficiaries after having reached retirement age; which accounts for roughly 2/3 of all beneficiaries in the Member States
Then, Anticipated old age pension paid out before the legal or standard retirement age;
And partial retirement pensions paid to pensioners who receive a portion of the full retirement pension as they continue to work
Then we have survivors' pensions;
and then two pension types under the disability function; the disability pension and the early retirement pension due to a reduced ability to work, both paid out before reaching legal/standard retirement age,
Which is also true for the last category, early retirement pensions due to labour market reasons. 9

10. Description: periodic payments...
The module on pension beneficiaries
ESSPROS function
Category
Description: periodic payments...
Old age
Old-age pension
i) to maintain the income of the beneficiary after retirement from gainful employment at the legal/standard age or ii) support the income of elderly persons
Anticipated old age pension
to maintain the income of beneficiaries who retire before the legal/standard age as established in the relevant scheme
Partial retirement pension
of a portion of the full retirement pension to older workers who continue to work but reduce their working hours or whose income from a professional activity is below a set ceiling.
Survivors
Survivors’ pension
to people whose entitlement derives from their relationship with a deceased person protected by the scheme
Disability
Disability pension
to maintain or support the income of someone below the legal/standard retirement age who suffers from a disability which impairs his or her ability to work or earn beyond a minimum level
Early retirement (work capacity)
to older workers who retire before reaching the legal/standard retirement age as a result of reduced ability to work
Unemploy-ment
Early retirement (labour market reasons)
to older workers who retire before reaching the legal/standard retirement age due to unemployment or to job reduction caused by economic measures
Additionally, disaggregation into
non means-tested vs. means-tested,
male and female beneficiaries
available for
all beneficiaries
the four ESSPROS functions
the seven categories
Now, beyond the distinction of seven types of pensions, the module also allows for the disaggregation into non means-tested and means-tested pensions, and for the break down by gender.
This information is available for all beneficiaries and at the level of both the four ESSPROS functions and the seven pension categories. 10

11. Description: periodic payments...
'Standard' vs. 'early retirement' beneficiaries
ESSPROS function
Category
Description: periodic payments...
Old age
Old-age pension
i) to maintain the income of the beneficiary after retirement from gainful employment at the legal/standard age or ii) support the income of elderly persons
Anticipated old age pension
to maintain the income of beneficiaries who retire before the legal/standard age as established in the relevant scheme
Partial retirement pension
of a portion of the full retirement pension to older workers who continue to work but reduce their working hours or whose income from a professional activity is below a set ceiling.
Survivors
Survivors’ pension
to people whose entitlement derives from their relationship with a deceased person protected by the scheme
Disability
Disability pension
to maintain or support the income of someone below the legal/standard retirement age who suffers from a disability which impairs his or her ability to work or earn beyond a minimum level
Early retirement (work capacity)
to older workers who retire before reaching the legal/standard retirement age as a result of reduced ability to work
Unemploy-ment
Early retirement (labour market reasons)
to older workers who retire before reaching the legal/standard retirement age due to unemployment or to job reduction caused by economic meas
Proposal: distinction of beneficiaries that receive benefits
(i) after reaching retirement age
(ii) before reaching retirement age
Now, what we propose is a new grouping of pension categories according to whether benefits are received before or after reaching the legal or standard retirement age.
Out of the seven categories, four explicitly provide pensions to beneficiaries that have not yet reached retirement age, which are highlighted here in red. Anticipated old age, ….
We therefore suggest to merge these four categories under the label "early retirement", as opposed to "standard" beneficiaries under the remaining three categories old age, survivors and partial retirement.
Number of methodological issues that need be taken into account, and I will talk to them when introducing the different applications we propose. 11

12. Measuring the magnitude of early retirement – methodological issues
Link the number of 'early retirement' beneficiaries to demography
Share older workers that receive a pension before reaching retirement age
Reference Population: people between age 50 and legal retirement age (LRA)
Methodological concerns:
Double counting when aggregating across functions
Survivors’ (& partial pension) beneficiaries below LRA not covered
Inclusion of pension beneficiaries living abroad (for the moment collected as voluntary information)
Cross-country comparability of aggregated statistics/ indicators ("average pension")

13. B. Possible extension of ESSPROS data (3): crisis monitoring-benefit recipients
ISG started an ad hoc collection on benefit recipients directly from Member States, to have more timely information on impact of crisis
MS send data on numbers of: social assistance, unemployment, early retirement, disability benefit recepients
Use:
More timely information on social situation
Better understanding of social outcomes
Assessing the performance of social protection systems
19/11/2014
ESSPROS Conference

14. . Possible extension of of ESSPROS data (3): crisis monitoring-benefit recipients (2)
Some outcome (in 2013 SPC report)
Mixed trends in unemployment benefit recipients
Pressure on social assistance schemes persists
Few countries show combined pressure on both unemployment and social assistance benefits
3 MS show a shift towards social assistance schemes
4 MS show downward trend in both unemployment and social assistance recipients
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ESSPROS Conference

15. . Possible extension of of ESSPROS data (3): crisis monitoring-benefit recipients (3)
Aspects of ISG collection to be analysed.
Lack of consistency in definition of benefit categories between Member States
Eg. Treatment of early retirement, social assistance, etc.
Can ESSPROS framework be used to improve ISG exercise? Can Eurostat extend the beneficiary data collection from pensioners (existing module) to the "ISG priority" benefits?
19/11/2014
ESSPROS Conference

16. C. Main demands for additional developments
Summary of ESSPROS main developments/improvements according to the analysis areas: 1. social protection financing (ESSPROS data by scheme) 2. measuring early retirement (module on pension beneficiaries) 3. crisis monitoring (extension of ESSPROS to other beneficiaries)
19/11/2014
ESSPROS Conference

17. Data by scheme Scope for further exploitation of scheme level data:
Dissemination of data by category of schemes (especially "public" vs. "private")
Improve accessibility of data by scheme (especially longer time series)
Improve geographical coverage of data by scheme (not yet available for all Member States)
19/11/2014
ESSPROS Conference

18. Improvements to existing ESSPROS data
Additional policy relevant pension benefit categories:
Benefits/beneficiaries after retirement age vs early retirement
Break-down by resident/non-resident becomes increasingly relevant from a policy perspective given rising cross-border mobility in the EU
How to disentangle non-relevant information – how to include relevant information
E.g. education expenditure in family benefits/’other benefits’ for elderly
19/11/2014
ESSPROS Conference

19. New data/indicators related to social protection
Information on number of beneficiaries other than pension beneficiaries:
Unemployment
Disability
Social assistance
Average pension benefit amounts: linking expenditure with number of beneficiaries (but need to tackle methodological issues first)
Separate presentation tool for ESSPROS long-term care related data and in-kind benefits
19/11/2014
ESSPROS Conference