Pension schemes: reform needed to ensure sustainability and adequate income, says Employment Committee

Published: 2 February 2011 y., Wednesday

The EU and its Member States must act to ensure that pension schemes can sustainably deliver an adequate income to the EU's growing number of retired people, despite the economic crisis, says Parliament's Employment Committee in a resolution voted on Tuesday. Pension portability must also be addressed, as must inequalities faced by women and older workers, say MEPs.

"At present there are four people of working age for every person over 65, by 2060 there will be just two" says a European Commission Green Paper, to which the Employment Committee resolution responds. 

"Although Member States have the lead, there are aspects where coordination at European level is important. The ageing of the population has a big impact because not all Member States have put money aside for their pensions. This could lead to enormous expenses which will have consequences for the Stability and Growth Pact. The supervising authority should monitor pension systems and some Member States must be encouraged to foresee a safe and adequate pension system", commented Ria Oomen-Ruijten (EPP, NL), who drafted the resolution.

Economic pressures

Responsibility for pensions lies with Member States, which are re-evaluating or reforming their schemes in the light of the current economic situation and the ageing of their populations. MEPs urge EU countries to maintain ”stable, reliable and sustainable” pension systems, as well as adequate retirement allowance levels to combat poverty in old age. Proper consultation should take place before making changes, they add.

Portable pensions

Europeans usually work for several employers during their careers, and many spend periods working in different EU countries. MEPs want the EU and Member States to remove obstacles to mobility and address pension transferability difficulties within and between EU Member States. For example, they say retirement plans should not require long contribution periods to be valid. 

Older workers

MEPs note the wide gap between the statutory pension age (which is under review in some countries) and the actual age at which many stop work. Older workers would benefit from better adapted workplaces and working conditions, as well as improved protection against dismissal, they say. 

Gender inequality

Inequalities in the labour market are translating into lower pensions for women, who face a high risk of poverty in old age. On average, women are paid less than men for equivalent work. They are also more likely to work part-time and take longer career breaks to care for family. MEPs urge the Commission and Member States to address inequalities and take account of these factors in retirement benefits.


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