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BackThis week, the plenum of the European Parliament (EP) in Strasbourg voted on the report on the Green Paper on Pensions. Nobody expected great surprises because the report - not exactly drafted in the interest of workers - was a compromise of all fractions. However, there was a welcome reversal in respect of the delicate issue of linking statutory retirement age to life expectancy. This demand was quashed with a wafer-thin majority of two votes by overall 736 voting MEPs. Unfortunately, this remained the only glimmer of light during the vote.
Rejection of linking statutory retirement ageto life expectancy
Since its presentation more than six months ago, the Green Paper on Pensions has been occupying the public; after all the issue of pensions concerns every one of us. The EP also took the matter up and drafted a report. Bearing in mind that a broad majority in the European Parliament’s competent committee had already voted for the report, the plenum vote was actually no more than a formality. The report was drafted by Ria Oomen-Ruijten, a Dutch Conservative politician. A very delicate key issue was the possible linking of the statutory retirement age to life expectancy. The Chamber of Labour has rejected this demand right from the start, because any automatism would mean that governments would shed their political responsibility in respect of any future decisions concerning old-age pensions. However, the EP recognized, albeit somewhat belated, that in a modern democracy such important decisions should not be taken by bypassing the processes of developing an informed opinion and interest intermediation (law-making procedure). The request to link the statutory retirement age to life expectancy was rejected with a wafer-thin majority of two votes. However, it is interesting that the EU Commission in its recently published Annual Growth Survey had clearly come out in favour of it. This caused, in particular with trade unions and worker representatives a storm of indignation, because to this date - also because of a lack of competence - the EU Commission had not become involved in these matters.
Too much emphasis on the importance of second and third pension pillars
The experiences of the economic and financial crisis have clearly shown that in particular the public and pay-as-you-go pension schemes have to be understood as stabilisers and guarantors for a safe and adequate pension. This is even mentioned by the EU Commission in its Green Paper on Pensions. However, the report in the EP regards the second and third pillar as a valve for the pressure, which rests on the first column and urges the Member States to secure the best-possible combination from all old-age pension schemes. The Annual Growth Survey by the EU Commission makes it even clearer and firmly supports the notion of building up private savings to top up pension benefits. It appears, as if there was a pretence that the second and third pension pillar were not at all associated with costs and risks. The object surely is to reduce public (pension) expenditure. A critical review of the private capital-based schemes, in particular after the crisis, is just not taking place. However, this would among others be a basis to find an answer to the important question as to how adequate, safe and sustainable pensions can be guaranteed.
Conclusion from the workers’ point of view: the fight continues
The Green Paper on Pensions represents the start of the discussion on old-age security, which has been going on for years. The situation is even aggravated by the consolidation pressure of the individual Member States. However, it must not get to the stage where one just adopts the guidelines from Brussels unchallenged and then takes the easy way out and passes the buck back to Brussels. Fact is, that the Member States have sole sovereignty in pension matters and that Brussels has no business in issuing guidelines. With its Annual Growth Survey, the EU Commission has ushered in a new era, which practically invites worker representatives to take up the fight: because if all demands, requested by the Commission, were implemented, this would have catastrophic consequences for Europe’s future.
Further information:
Press release of the European Parliament on the vote on the Green Paper on Pensions
Report of the European Parliament on the Green Paper on Pensions
Since its presentation more than six months ago, the Green Paper on Pensions has been occupying the public; after all the issue of pensions concerns every one of us. The EP also took the matter up and drafted a report. Bearing in mind that a broad majority in the European Parliament’s competent committee had already voted for the report, the plenum vote was actually no more than a formality. The report was drafted by Ria Oomen-Ruijten, a Dutch Conservative politician. A very delicate key issue was the possible linking of the statutory retirement age to life expectancy. The Chamber of Labour has rejected this demand right from the start, because any automatism would mean that governments would shed their political responsibility in respect of any future decisions concerning old-age pensions. However, the EP recognized, albeit somewhat belated, that in a modern democracy such important decisions should not be taken by bypassing the processes of developing an informed opinion and interest intermediation (law-making procedure). The request to link the statutory retirement age to life expectancy was rejected with a wafer-thin majority of two votes. However, it is interesting that the EU Commission in its recently published Annual Growth Survey had clearly come out in favour of it. This caused, in particular with trade unions and worker representatives a storm of indignation, because to this date - also because of a lack of competence - the EU Commission had not become involved in these matters.
Too much emphasis on the importance of second and third pension pillars
The experiences of the economic and financial crisis have clearly shown that in particular the public and pay-as-you-go pension schemes have to be understood as stabilisers and guarantors for a safe and adequate pension. This is even mentioned by the EU Commission in its Green Paper on Pensions. However, the report in the EP regards the second and third pillar as a valve for the pressure, which rests on the first column and urges the Member States to secure the best-possible combination from all old-age pension schemes. The Annual Growth Survey by the EU Commission makes it even clearer and firmly supports the notion of building up private savings to top up pension benefits. It appears, as if there was a pretence that the second and third pension pillar were not at all associated with costs and risks. The object surely is to reduce public (pension) expenditure. A critical review of the private capital-based schemes, in particular after the crisis, is just not taking place. However, this would among others be a basis to find an answer to the important question as to how adequate, safe and sustainable pensions can be guaranteed.
Conclusion from the workers’ point of view: the fight continues
The Green Paper on Pensions represents the start of the discussion on old-age security, which has been going on for years. The situation is even aggravated by the consolidation pressure of the individual Member States. However, it must not get to the stage where one just adopts the guidelines from Brussels unchallenged and then takes the easy way out and passes the buck back to Brussels. Fact is, that the Member States have sole sovereignty in pension matters and that Brussels has no business in issuing guidelines. With its Annual Growth Survey, the EU Commission has ushered in a new era, which practically invites worker representatives to take up the fight: because if all demands, requested by the Commission, were implemented, this would have catastrophic consequences for Europe’s future.
Further information:
Press release of the European Parliament on the vote on the Green Paper on Pensions
Report of the European Parliament on the Green Paper on Pensions