1. Implications of Demographic Changes on Public Sector Pensions
Roger Hessel - Lecturer
European Training Centre for Social Affairs
and Public Health Care CEFASS - Milan (I)
Europan Institute of Public Administration EIPA
- Maastricht (NL)

3. Diversity of Pension Schemes10 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

4. Main Outcome of the Survey
Raising 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

5. 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
‘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 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 BUT ? Will legislat change attitudes/culture?
UK: Code of Practices “New Deal 50+”: 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 ”

6. EMPLOYMENT IMPLICATIONS FINANCIAL IMPLICATIONS POLITICAL FEASABILITY
SOCIAL IMPLICATIONS
HOLISTIC APPROACH
FINANCIAL IMPLICATIONS
POLITICAL FEASABILITY

7. Financial Education Programmes: Good practices
SW: Orange letters
NL: New legislation for pension funds
DK: Website ‘Pension-Info’
Financial education programmes for public & private employees to increase savings by private, funded pension schemes in: A, D, FIN, F, HU, L, NL, UK
Lisbon Strategy: ‘Information Society’! -->
Need for clear signals long time in advance
Education: widely considered as Good practices in SW
“Orange letters”: pension account statements; tool to inform employees on their growing pension entitlements; aim: raise awareness that pension rights have to be earned on long-term basis; however, ‘devil in the detail’: When I receive my account letter from my agency responsible for pensions for lawyers: I ‘don’t see wood by al the trees’

8. 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

9. In Summary Main instruments for reforms: 1. Increasing employment rate
2. Financial education programmes
Preliminary remark:
we are a small group --> Ask Questions!
Pension reform debate = likely to heat up in y ahead climate of uncertainty Lack of trust
For sure a all over trend towards privatisation
People: scared to loose their pensions
Politicians: scared to loose election
Trend towards pens privatisation
Agenda (see below)

10. Employment rate total / Older workers (55-64)80 60 40 20
EU 25
EU 25
10 new MS
10 new MS
Northern States
Northern States

11. Under the Eye of the EU Joint Report Pension Funds Directive
A pan-European Single Market?
Reffering to Philippe Pochet this morning: Pensions = Example of “OMC”
regarding: ‘multi-level governance’
benchmarking exercise
define common objectives
way organised mutual learning (metaphor: in Europe, we are “eating more and more our plates from dishes of our neighbours”...)
Pension Funds Directiv (below): idea --> take advantage of eco. Integration; objective of Europ Soc Agenda
Family = system of transfer of support, social and financial support; becoming more important
BGH ruling: Grandchildren have to pay for their grandparents + parents-in-law
2 biggest challenges (Gösta Esping-Andersen): family structure; no leitbild
D: benefits for families --> not visible