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This week, the Commission presented the long awaited Green Paper on adequate, sustainable and safe European pension systems. A field day for all those, who now feel vindicated, as they had said all along that “a comprehensive pension reform” would be an unavoidable necessity. Once again, the EU perfectly embodies the role of the bringer of bad news. One cannot help the feeling that the bad news from Brussels had been eagerly awaited to be able to do at last what otherwise one would not have dared – Thank you EU!

Green Paper is start of a public consultation on pensions

A Green Paper is not a recommendation of the EU, even if some see it that way. A Green Paper includes questions, asked by the Commission, to which it would like answers. Unfortunately, everyone interprets the Green Paper, as he/she would like it to be. Some, to warn against a pension at 70, others to demand a comprehensive pension reform at last.  That this results in wild speculations is obvious; pensions are a national issue and the relevant competences of EU are limited. In particular, these points opened the room for speculations long before the publication of the Green Paper. When the responsible Employment Commissioner, László Andor, presented the Green Paper at today's press conference, denying that the Commission had made any recommendations regarding raising the retirement age to 70, it was already too late. The media got what they wanted: a headline, which caused plenty of fear and anxiety. When Andor declared that his intention was by "no means to urge” the EU States to raise the retirement age "overnight", he did not exactly calm the situation. In his closing words he said, "the Commission tended to the thesis that the working life should be extended" and "we think that the retirement age will continue to rise".

Retirement age at 70 cannot quite be dismissed

The Green Paper includes a diagram, which depicts the possibility of a pensionable age at 70. An account of the ratio of the working public compared to the number of pensioners shows that in 2010, at an assumed retirement age of 60, five people in employment are opposite two pensioners of over 60. In order to be able to maintain the ratio of 5:2, it would be necessary to extent the working life to 67 by 2040 and to raise it by an extra 3 years by 2060 – hence to 70 years. The decisive factor, however, should be the effective retirement age, because it was this that this actually to be increased.

Public consultation will run until 15. November 2010

The public consultation will run until 15.11.2010. During this period, one is able to reply to the 14 questions posed by the Commission. Afterwards, the Commission will analyse the contributions and submit its plans. Whether the Green Paper will be followed by legislative or political initiatives, remains to be seen. AK will participate in the consultation, evaluate the possible impact of the Green Papers in detail and to continue to take an active part in the debate on pensions in Brussels.

Further information:

Green Paper on Pensions

Press release of the Commission on the Green Paper Pensions