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BackFollowing the publication by the EU Commission of the White Paper on Pensions, one of the most important strategy papers on the subject of pensions, in February this year, it is now the turn of the European Parliament to have its input. The competent rapporteur recently presented her report and made no secret of her ideas: expanding private retirement savings and occupational retirement schemes as well as the necessity to link the statutory retirement age to life expectancy. Demands, which are met with considerable opposition by labour representatives.
Europe’s population is ageing, time to draw the right conclusions
Europe’s population is getting increasingly older because people are living longer and have fewer children. The economically active population in Europe will start to shrink as early as next year. The financial pressure exerted on national budgets by pensions will increase, not least because of the additional burden by the economic and financial crisis. With the aim to support the efforts of the Member States, the European Commission has published a White Paper on adequate, safe und sustainable pensions. The EU Parliament has been dealing with it now and presented its respective ideas. The competent Conservative Parliamentary rapporteur, Ria Oomen-Ruijten, also recently presented her draft report. It came as no surprise that she agreed with the ideas of the Commission and came out in favour of expanding private retirement savings and automatically lionking statutory retirement age to increasing life expectancy. From the point of view of the AK, these are two points, which do not provide the right answers to dealing with an ageing population. The right course of action would be to use all available means to ensure that more people are in work, and that the Europe 2020 target, envisaging a 75 % employment rate, will be fulfilled. This would render many measures unnecessary, which at first glance look quite plausible and appear to offer a quick solution.
Demographic data must not be reinterpreted
The current demographic developments give reason for concern but also for joy, because we are living increasingly longer; at least according to the draft report by Ruijten. Unfortunately, data, which she is stating as fact does not match reality. Her account that in 2008 there were four people in work for every pensioner and in 2060 there will be one pensioner for every two people in work is plainly wrong. What is correct is the fact that today there are four people of working age in relation to one pensioner. However, her demographic data does not explain whether in 2060 these four people resp. two persons of working age will indeed be in a job! However, Oomen-Ruijten is not alone in consciously or unconsciously mixing such data; the Economist, the Frankfurter Allgemeine Zeitung etc. are also guilty of this. However, it is of vital significance for the debate on the financial sustanability of pension systems whether someone is indeed in work. The decisive factor in the entire debate is labour participation, and not whether the statutory retirement age should be raised or linked to increasing life expectancy. This must now also be conveyed to the European Parliament.
Further information:
Brief assessment by the AK on the White Paper on Pensions
Draft report by MEP Oomen-Ruijten on the White Paper on Pensions
AK and EPC Policy Brief: 1000 billion Euros at stake – How boosting employment can address demographic change and public deficits (English only)
Europe’s population is getting increasingly older because people are living longer and have fewer children. The economically active population in Europe will start to shrink as early as next year. The financial pressure exerted on national budgets by pensions will increase, not least because of the additional burden by the economic and financial crisis. With the aim to support the efforts of the Member States, the European Commission has published a White Paper on adequate, safe und sustainable pensions. The EU Parliament has been dealing with it now and presented its respective ideas. The competent Conservative Parliamentary rapporteur, Ria Oomen-Ruijten, also recently presented her draft report. It came as no surprise that she agreed with the ideas of the Commission and came out in favour of expanding private retirement savings and automatically lionking statutory retirement age to increasing life expectancy. From the point of view of the AK, these are two points, which do not provide the right answers to dealing with an ageing population. The right course of action would be to use all available means to ensure that more people are in work, and that the Europe 2020 target, envisaging a 75 % employment rate, will be fulfilled. This would render many measures unnecessary, which at first glance look quite plausible and appear to offer a quick solution.
Demographic data must not be reinterpreted
The current demographic developments give reason for concern but also for joy, because we are living increasingly longer; at least according to the draft report by Ruijten. Unfortunately, data, which she is stating as fact does not match reality. Her account that in 2008 there were four people in work for every pensioner and in 2060 there will be one pensioner for every two people in work is plainly wrong. What is correct is the fact that today there are four people of working age in relation to one pensioner. However, her demographic data does not explain whether in 2060 these four people resp. two persons of working age will indeed be in a job! However, Oomen-Ruijten is not alone in consciously or unconsciously mixing such data; the Economist, the Frankfurter Allgemeine Zeitung etc. are also guilty of this. However, it is of vital significance for the debate on the financial sustanability of pension systems whether someone is indeed in work. The decisive factor in the entire debate is labour participation, and not whether the statutory retirement age should be raised or linked to increasing life expectancy. This must now also be conveyed to the European Parliament.
Further information:
Brief assessment by the AK on the White Paper on Pensions
Draft report by MEP Oomen-Ruijten on the White Paper on Pensions
AK and EPC Policy Brief: 1000 billion Euros at stake – How boosting employment can address demographic change and public deficits (English only)