Europe’s pension systems can be expected to deliver adequate pensions also to future generations of retirees providing Member States pursue strong policies to enable as many workers as possible to stay in jobs until they reach the statutory pension age.
This is one of the main conclusions of a new report on pension adequacy.
Employment policies should provide more possibilities for older workers to stay longer in the labour market.
However, pension systems must also provide protection for those who are unable to remain in the labour market long enough to build up sufficient pension entitlements. The findings of the 2015 Pension Adequacy Report will be endorsed today by the Employment and Social Affairs Council.
Welcoming the report, Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labour Mobility commented: “Recent pension reforms have focused on ensuring pensions for a much larger older population without destabilising public finances. This can only be achieved if the great majority of people are offered enough opportunities to keep on working until they reach the regular retirement age that is set to rise across the EU. Our priority must be to invest enough in people’s skills and health to enable them to use such opportunities. We also need solidarity with those who cannot and may need to rely on unemployment or invalidity benefits before reaching the retirement age.”
According to the report, for the EU as a whole, pensions currently provide most people with sufficient protection against poverty and adequate income security in old-age. Overall, older people in the European Union enjoy living standards close to those of the younger population.
On average in the EU, the median disposable income of people aged 65 or above stands at 93 percent of the income of those younger than 65. Even during the crisis older people have been better protected than other age groups.
But several Member States still need to put more effort into tackling poverty risks and guaranteeing income security in old-age.
Across Member States pension outcomes are marked by persistent gender differences, with women being more exposed to poverty and having lower pensions than men, due to lower salaries and shorter working lives linked to caring duties. On average, women also live longer than men, and as a consequence are more likely to become widowed and end up in more precarious single person households.
On average in the EU, women’s pensions are 40 percent lower than men’s. Gender gaps in pensions can be reduced, but often it will require long-term policy efforts that combine equal opportunity policies across several fields, before people reach the pensionable age, with changes in the pension system.
In the future, it will be increasingly important to complete a full working career with 40 to 45 years of pension contributions in order to receive a decent pension. In some Member States, future income maintenance after retirement will increasingly depend on private provision through occupational or personal pension schemes.