On 16 February 2012, the European Commission published a White Paper on adequate, safe and sustainable pensions.
Pensions are the main income source for around a quarter of the EU's population today and younger Europeans will also come to rely on pensions later in their lives. Unless Europe delivers on decent pensions now and in the future, millions will face poverty in old age.
Europe is also ageing as people live longer and have fewer children. From 2013, the EU's working population will already start to shrink. Pensions are putting increased financial pressure on national budgets, especially with the added strain of the financial and economic crisis.
To support these efforts, the European Commission has published a White Paper on adequate, safe and sustainable pensions. The White Paper proposes to:
- Create better opportunities for older workers by calling on the social partners to adapt work place and labour market practices and by using the European Social Fund to bring older workers into work.
- Develop complementary private retirement schemes by encouraging social partners to develop such schemes and encouraging Member States to optimise tax and other incentives;
- Enhance the safety of supplementary pension schemes, including through a revision of the directive on Institutions for Occupational Retirement Provision (IORP) and better information for consumers;
- Make supplementary pensions compatible with mobility, through legislation protecting the pension rights of mobile workers and by promoting the establishment of pension tracking services across the EU.
- Encourage Member States to promote longer working lives, by linking retirement age with life expectancy, restricting access to early retirement and closing the pension gap between men and women.
- Continue to monitor the adequacy, sustainability and safety of pensions and support pension reforms in the Member States.
Industry associations divided on White Paper on pensions
Pension figures have expressed mixed views on the White Paper on pensions, with some reiterating concerns over plans to revise the IORP directive. The inclusion of a new passage on Solvency II in the long-awaited final version of the White Paper caught many in the industry by surprise. Read more.
Some proposals within the White Paper on pensions – including the Solvency II quantitative framework – could threaten the very existence of workplace pensions, the European Association of Paritarian Institutions (AEIP) has claimed. Read more.
Sources: European Commission, IPE, AEIP, AEGON Global Pensions.
