Presentation is loading. Please wait.

Presentation is loading. Please wait.

Commission européenne 1 -1- European Pension reforms International Forum on Pension Reform: Exploring the Link to Labour and Financial Market Reforms Bled.

Published byClifton Goodman Modified over 9 years ago

Similar presentations

Presentation on theme: "Commission européenne 1 -1- European Pension reforms International Forum on Pension Reform: Exploring the Link to Labour and Financial Market Reforms Bled."— Presentation transcript:

1 Commission européenne 1 -1- European Pension reforms International Forum on Pension Reform: Exploring the Link to Labour and Financial Market Reforms Bled - Slovenija 7-9 May 2007 O. Bontout, G. Fischer European Commission Employment, Social Affairs & Equal Opportunities DG

2 Commission européenne 2 -2- Pension reforms ➢ A common challenge and approach in EU ➢ Main developments in current reforms ➢ Recent developments : labour market and pension prospects ➢ Some outstanding issues

3 Commission européenne 3 -3- I - A common pension challenge: adjustments needed Increase in life expectancy and dependency ratios Decline in effective retirement ages … reversal in recent years Contribution rates – further increases ?

4 Commission européenne 4 -4-

5 5 -5-

6 6 -6- Life expectancy at 60 and activity rates 55-64 Source Eurostat for Life expectancy and ILO (ES and SE 1970-2000, FR 1968-2000, IT 1971-2000, UK 1971-1991)

7 Commission européenne 7 -7- 40%25%18%Ratio 70+ /20-69 58%39%27%Ratio 65+ /20-64 80%58%39%Ratio 60+ /20-59 205020252004 Note : EU25. Source : Eurostat 2005 demographic projections. 7 Projected evolution of dependency ratios

8 Commission européenne 8 -8- A common challenge All systems are concerned: DB, DC, NDC, PAYG, funded, Member States are not interdependent: –public finance, –mobility, –common social rights and objectives,

9 Commission européenne 9 -9- Common European Approach Pension systems to be reformed to ensure: Adequate benefits: poverty and income replacement Financial sustainability Adaptation to societal/ labour market change Adequacy and Sustainability are mutually reinforcing : virtuous or vicious circle

10 Commission européenne 10 -10- European Action: the OMC Open Method of Coordination: National Strategy Reports 2005, Social Protection Committee to review progress und prepare for Council, Recently issued synthesis report (2006) New objectives adopted in Spring 2006

11 Commission européenne 11 -11- II - Key elements arising from current pension reforms Strengthening incentives for working longer Developing a life-cycle approach and strengthening the link between contributions and benefits while reducing access to early paths out of employment

12 Commission européenne 12 -12- Key elements arising from current pension reforms Making pension systems more adaptable to structural changes in society Develop secure private pensions complementing and partially replacing public pension provision

13 Commission européenne 13 -13- Commission européenne 13 -13- III - Recent developments Labour market - a recent reversal Benefits - the key channel of working longer

14 Commission européenne 14 -14- Recent increase in employment of older workers, but huge potential Source : LFS

15 Commission européenne 15 -15- Older workers employment (55-64)

16 Commission européenne 16 -16- Older workers employment (55-59)

17 Commission européenne 17 -17- Older workers employment (60-64)

18 Commission européenne 18 -18- Part time employment (55-64)

19 Commission européenne 19 -19- Part time employment (55-64)

20 Commission européenne 20 -20- Commission européenne 20 -20- Between MSs ? Men / Women ? Less / medium and high skilled ? Some risks of divergence ?

21 Commission européenne 21 -21- Average standard deviation of employment rates 55-64 and 25-54 Commission européenne 21 -21- Non convergence between MSs? Source : LFS – Note : Total for all Member States available, EU* for a group of Member States where are available all the period long (BE, DK, DE, IE, EL, FR, IT, LU, NL, UK)

22 Commission européenne 22 -22- Average standard deviation of employment rates 55-59 and 60-64 Commission européenne 22 -22- Non convergence between MSs? Source : LFS – Note : Total for all Member States available, EU* for a group of Member States where are available all the period long (BE, DK, DE, IE, EL, FR, IT, LU, NL, UK)

23 Commission européenne 23 -23- Commission européenne 23 -23- Slow convergence between Genders ? Employment rates by gender for 55-64 in EU

24 Commission européenne 24 -24- Commission européenne 24 -24- Divergence between skill levels? Employment rate of men 55-64 in EU25

25 Commission européenne 25 -25- Commission européenne 25 -25- Projected long term trends Adequacy : theoretical replacement rates Sustainability : expenditures projections

26 Commission européenne 26 -26- Trend of replacement rates : effect of enacted reforms at a given retirement age 2005-2050 A trend toward a decline in most statutory schemes Source : Stylised illustration from ISG results on gross replacement rates

27 Commission européenne 27 -27- How to compensate for this decline ? Working longer and private pensions Source : Stylised illustration from ISG results on gross replacement rates

28 Commission européenne 28 -28- Trends of future pension expenditures Source : AWG projections

29 Commission européenne 29 -29- Commission européenne 29 -29- IV - Some key issues  Concerns about equity and poverty  Compulsion vs. incentives : private pensions and working longer  How to fully restore social and financial sustainability ?

30 Commission européenne 30 -30- Commission européenne 30 -30- Key issues (1)  Concerns about equity and poverty Risks related to inadequate pension provision A revival of minimum income provision

31 Commission européenne 31 -31- Commission européenne 31 -31-  How to strengthen the role of minimum pensions and solidarity in pension systems ? –Poverty risk among elderly remains generally higher than overall population –Links between level of benefits, degree of means-test, incentives and indexation rules –A need for appropriate monitoring tools

32 Commission européenne 32 -32- Commission européenne 32 -32- Poverty risk among elderly Source Eurostat, income data

33 Commission européenne 33 -33- Theoretical replacement rates : effect of indexation 10 years after retirement (2005-2015) Source : ISG results on gross replacement rates

34 Commission européenne 34 -34- Commission européenne 34 -34- Key issues (2)  Compulsion vs. incentives : private pensions and working longer –Choice, incentives for earlier / deferred retirement, partial retirement –Importance to review incentives structures: are incentives strong enough? –But pension reform can not do everything

35 Commission européenne 35 -35- Retirement: incentives and behaviour Source : Illustration from SPC report on flexible age of retirement (forthcoming), Replacement calculations from EU Commission-OECD project ‘’Modelling pension entitlements'

36 Commission européenne 36 -36- Commission européenne 36 -36- Key issues (3)  How to fully restore social and financial sustainability ? –Importance of an integrated approach –Development of automatic and semi – automatic adjustment mechanisms: automatic mechanisms vs. regular reviews –Importance of transparency

37 Commission européenne 37 -37- Conclusion Pension reform in progress Working longer: breakthrough needed Promoting longer working lives involves not only pension reform Improve transparency and governance to allow policy decisions on priorities

Download ppt "Commission européenne 1 -1- European Pension reforms International Forum on Pension Reform: Exploring the Link to Labour and Financial Market Reforms Bled."

Similar presentations

1 Promoting Adequate and Sustainable Pensions through the Open Method of Coordination Presentation by the European Commission Tallinn, 12 November 2003.

1 Promoting Adequate and Sustainable Pensions through the Open Method of Coordination Presentation by the European Commission Tallinn, 12 November 2003.
Ageing in OECD countries and the need for private pensions Stéphanie Payet and Clara Severinson The Working Party on Private Pensions 24 October 2011.

Ageing in OECD countries and the need for private pensions Stéphanie Payet and Clara Severinson The Working Party on Private Pensions 24 October 2011.
1 Reflections on the future Cohesion Policy DG Regional Policy European Commission.

1 Reflections on the future Cohesion Policy DG Regional Policy European Commission.
EPC/SPC Joint Report on Pensions Aurelio Fernández – SPC Chair Assuring adequate pensions and social benefits for all European Citizens Liège, 7-8 September.

EPC/SPC Joint Report on Pensions Aurelio Fernández – SPC Chair Assuring adequate pensions and social benefits for all European Citizens Liège, 7-8 September.
IAA Response to World Bank Report on Old-age Income Support in the 21 st Century IAA Response to World Bank Report on Old-age Income Support in the 21.

IAA Response to World Bank Report on Old-age Income Support in the 21 st Century IAA Response to World Bank Report on Old-age Income Support in the 21.
1 Monitoring progress towards the objectives of the European Strategy for Social Protection and Social Inclusion Bucharest, 17 November 2009 EUROPEAN.

1 Monitoring progress towards the objectives of the European Strategy for Social Protection and Social Inclusion Bucharest, 17 November 2009 EUROPEAN.
1 Promoting Adequate and Sustainable Pensions through the Open Method of Co-ordination ADEQUACY, FINANCIAL SUSTAINABILITY and MODERNISATION European Commission.

1 Promoting Adequate and Sustainable Pensions through the Open Method of Co-ordination ADEQUACY, FINANCIAL SUSTAINABILITY and MODERNISATION European Commission.
European Commission 23 Feb 2010Directorate-General for Employment, Social Affairs and Equal Opportunities1 Pension systems across the EU - Before & after.

European Commission 23 Feb 2010Directorate-General for Employment, Social Affairs and Equal Opportunities1 Pension systems across the EU - Before & after.
Successful policy mixes to tackle the impact of rising inequality on children - an EU-wide comparison - András Gábos TÁRKI Social Research Institute Changing.

Successful policy mixes to tackle the impact of rising inequality on children - an EU-wide comparison - András Gábos TÁRKI Social Research Institute Changing.
Georg Fischer European Commission The European Social Policy debate EUROPEAN COMMISSION DG Employment and Social Affairs.

Georg Fischer European Commission The European Social Policy debate EUROPEAN COMMISSION DG Employment and Social Affairs.
Review of the Maltese Pension System: Understanding the challenge

Review of the Maltese Pension System: Understanding the challenge
Demography, ageing and pensions Can Europe afford to grow old?

Demography, ageing and pensions Can Europe afford to grow old?
THE SECOND ANNUAL EUROPEAN PENSIONS CONFERENCE ANNE MAHER Chief Executive20 April 2004 The Pensions Board Ireland A PENSIONS ROLE MODEL FOR EUROPE?

THE SECOND ANNUAL EUROPEAN PENSIONS CONFERENCE ANNE MAHER Chief Executive20 April 2004 The Pensions Board Ireland A PENSIONS ROLE MODEL FOR EUROPE?
1 Changing attitudes and perceptions about older workers AGE - the European Older People’s Platform Changing attitudes and perceptions about older workers.

1 Changing attitudes and perceptions about older workers AGE - the European Older People’s Platform Changing attitudes and perceptions about older workers.
1 Live Longer, Work Longer: A geing and employment policies Patrik Andersson Employment, Labour and Social Affairs, OECD Thessaloniki, 12-13 October, 2006.

1 Live Longer, Work Longer: A geing and employment policies Patrik Andersson Employment, Labour and Social Affairs, OECD Thessaloniki, October, 2006.
1 Making use of long-term demographic projections in multilateral policy coordination in the EU Per Eckefeldt DG ECFIN European Commission Joint Eurostat/UNECE.

1 Making use of long-term demographic projections in multilateral policy coordination in the EU Per Eckefeldt DG ECFIN European Commission Joint Eurostat/UNECE.
TAKING PART & BEING ACTIVE – HOW ACTIVE INCLUSION CONTRIBUTES TO THE EUROPEAN SOCIAL MODEL Minimum income, minimum wage and active inclusion Some recent.

TAKING PART & BEING ACTIVE – HOW ACTIVE INCLUSION CONTRIBUTES TO THE EUROPEAN SOCIAL MODEL Minimum income, minimum wage and active inclusion Some recent.
Europe’s Pension Challenges Liam Kennedy Editorial Director, Investment & Pensions Europe AMAC, Beijing, 16 June 2014.

Europe’s Pension Challenges Liam Kennedy Editorial Director, Investment & Pensions Europe AMAC, Beijing, 16 June 2014.
Conference on Active European Citizenship European Project « Dialogue with the EU – The Voices of the Citizens » Athens, 19 February 2010 Céline Simonin,

Conference on Active European Citizenship European Project « Dialogue with the EU – The Voices of the Citizens » Athens, 19 February 2010 Céline Simonin,
The fiscal costs of ageing in the euro area: will the young have to pay the bill? Ad van Riet Head of the Fiscal Policies Division European Central Bank.

The fiscal costs of ageing in the euro area: will the young have to pay the bill? Ad van Riet Head of the Fiscal Policies Division European Central Bank.

Similar presentations

Ads by Google