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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)393final
Brussels,14thJuly1980
COMMUNITY GUIDELINES ONFLEXIBLE RETIREMENT
■■■ HIl
/
(Communication fromtheCommission)^P! CommunicationfromtheCommission)"Fl
.^•t/y ■
\
C0M(80)393final*

CONTENTS
INTRODUCTION
PERSPECTIVES ANDCOMMUNITY GUIDELINES :
I.FLEXIBLET RETIRERENT
II.PHASED RETIREMENT -
III.ECONOMIC SITUATION
IV.CONCLUSIONS
APPENDICES :
I.ECONOMIC ANDFINANCIAL ASPECTS OFEARLY
RETIREMENT SCHEMES
II.COSTOFCERTAIN NATIONAL EXPERIMENTS ON
FLEXIBLE ORPHASED RETIREMENT

INTRODUCTION
1, InitsCommunication totheCouncil (COM (79)188Pinal )of7May
y
1979 concerning work Bharing ,theCommission noted that there wasawide
range ofpossible action with regards toarrangement ofworking time .
TheCommission felt however that various problems ,such asflexible
retirement ,justified aCommunity approaoh .TheCommission furthermore
pointed outthat action inthat field ,asinallthose pinpointed ,should
take account oftheir impact onemployment ,oftheir intrinsic merits as
regards working conditions and of ,their relative cost#
Asafollow uptothis Communication ,theCouncil invited the
Commission topursue itsstudies .InitsResolution of18December 1979
concerning the arrangement ofworking time ,theCouncil recalled the
importance that itattached totheCommission ^pursuing itswork on
flexible retirement .
Thepresent document issubmitted inreply tothis request .
2. Theproblem ofretirement agecanbeapproached intwodifferent
ways .Inthefirst one ,given thepresent deterioration oftheemployment
market ,theproblem ofretirement ageisconsidered interms ofworksharing
within theactive population .Onthecontrary ,thesecond perspective , .
baaed onananalysis ofthemore permanent needs andwishes oftheelderly ,,
considers ways andmeans ofsatisfying them .These solutions tend to
adjust thesystems bytheinclusion ofadouble flexibility which would
allow ,ontheonehand ,wider individual choioe ofretirement ageand ,
ontheother ,possibilities ofreduced working time inthelast years of
active life . v

TheCommission proposes Community guidelines likelytosatisfy
alltheinterested parties.Theseguidelines stemfromthesolutions
whichprovideforsuohdoubleflexibility asmentioned above,gridthey~~
moreovertakeintoaccounttheneedtoorganisetheirimplementation
intermsoftheeconomiosituation whichnowadays,ismainlycharacterised "by
adeterioration intheEmployment situation.
3,Theseperspectives andtheseCommunity guidelines willbedeveloped
indetailinthefollowing pagesbutthereasonswhichjustifyaCommunity
approach needperhapstobeindicated first,.
Inthelastfewyears,several MemberStateshavetakenthe
initiative asregardsmodifying ,temporarily ordefinitely ,thetraditional
processofretirement .Thisprocess wasalsobeingquestioned byvarious
expertsinthefieldofoldage.Retirement agehastherefore becomea
political problemforgovernments .
Intheabsenceofconvergent action,thesolutions optedfor,could
easilyvaryfromoneStatetoanother,although theymaytendtowards
nearsimilarobjectives .Furthermore theexperiments carriedoutarenot
allofequalvalue:insomeoftheschemes,sometimes adoptedunder
pressure oftheeconomiccrisis,thereare,alongwithimmediate advantages ,
significant inconveniences inafieldwhereeffectscanbefeltonlyin
thelongterm.
Consequently ,aCommunity approach seemstobejustified.Inthe
lightofnational experiences andoftheworkofexperts,theCommission
believesthatitcancontribute topromoteoonvergency offutureretirement

m3
policies layformulating guidelines whichtakeintoaccounttheaspirations
andneedsofindividuals aswellastheinterests ofthecommunity as
awhole*
4*Twoappendices areattached tothepresent Communication :^
1.Economic andfinancial aspectsofearlyretirement schemes;
2.Costofcertainnational experiments onflexible orphased
retirement -

4
PROSPECTS AND COMMUNITY GUIDELINES •'
I.FLEXIBLE KETIREMENT
Interms oftherelationship between the individual andthe social
security system ,retirement age istheageatwhich entitlement toapension
is-acquired .Interms -oftherelationship "between theindividual andthe
working world ,retirement age istheage atwhich aperson ceases work .
Those whocall for earlier retirement ;,emphasize entitlement toa
pension andleave aside thequestion ofcessation ofwork .Thus there
arises aoonflict between theclaims ofindividuals whowish togetthe
benefit ofapension asearly aspossible andthefinancial constraints ,
which cannot bedissociated from demographic andeconomio faotors ,andto
which theschemes inquestion aresubjected .
However nowadays anewaspect oftheproblem ofearly retirement
hasoome tolight ajidthis isduetothefact that theeconomic crisis has
amarked effect ontheterms oftheproblem .
Infact ,early retirement ismore andmore being presented asone
ofthose many remedies tothedecline inemployment levels and itssupporters
include itinwork sharing policies .There ensues animplication that legal
constraints orfinancial incentives will beused topersuade the oldest
workers orjobseekers toleave theaotive population –andthis retirement
from working life isnowplaced tothevery forefront ,

5
Thus ,invarious Community countries ,endeavours arebeing made to
encourage people toretire early from alloccupations byproviding them
with "bridging pensions "or"early retirement pensions ",which aregranted
oncondition that they cease work butarehigh enough toprovide ample
compensation andthus actasanincentive (between 70and90%ofthesalary
depending onthecountry ).Such schemes (Appendix i),have been introduced
inBelgium ,Denmark ,Prance ,Luxemburg andthe^United Kingdom and ,forsome
occupational seotors only ,intheNetherlands •Similar results areobtained
inGermany byregulations inthefield ofunemployment insurance and
conventional ,agreements (asinthesteel industry ).
Some observations are however called for :
1,First ofallthehopes ofcreating jobmaybethwarted insofaras
thereal significance ofsuch departures from thelabour market onto
retirement hasyettobeproved jthe jobs vacated byolder workers maynot
necessarily suit theyounger ones .
2,Furthermore thecost ofthis polioy isinevitably high (see
comparative table inAppendix l)fatatime when thepresent andfuture
circumstances ofold–ageinsurance schemes areoften gloomy ,"Early
retirement pensions "or"bridging pensions "are ,ofcourse ,often included
intheframework ofunemployment schemes ,thus emphasizing their contingent
characteristic andmore readily justifying thebanonworking imposed on
thebeneficiaries –;butarenotsuch innovations irreversible ?
3,Finally andinamore fundamental way ,thequestion arises as
towhether allolder workers wish toleave active life with thesole proviso
that they receive adequate compensation .Obviously this isnotthecase .
Those whosodesire ,andthey areundoubtedly inthemajority ,arethose
whose only interest intheir work isfinancial .However others whohave

beenluckyenoughtoenj.yamore"rewarding "professional career,inthe
■broadest senseoftheword,keenlyresentbeingdiscarded fromactivelife
Opinionpollsrevealawidevarietyofattitudes towardsretirement and
theirfindingsaresupported bytheCommunity survey,alongwithnational
enquiries ,pntheattitudes oftheactivepopulation withregardsto
retirement prospects .
Thelastobservation ,inparticular ,calJLsfox-theintroduction
ofsomeflexibility intheretirement age,,whichcouldbeachieved by ■,
offering someleewayindetermining theageinquestiontoeverybody .
A)Theprinciple
Nowadays (l)tretirement age,inthesenseoftheageatwhich
pensionrightsareacquiredisaspecifictfixedage,suchas65•The
veryconceptof"flexibility "conflicts withthisrigidrole:itimplies
thatwithincertainlimits,thoseconcerned aregivenachancetoelect
atwhattimetheywanttostartclaimingtheirold–agepension.
Thisoptioncanberegarded intwodifferent lights,depending on
whetheritrelatesto"median"age,regarded asnormal,withopportunities
forearlierorlaterretirement ,ortoaminimumage.
AsimpleexamplepfthefirstsystemisthebasicSwedishpension,
whiohmaybegrantedbefore65withareduction of0.5%permonthifit
istakenearlier,orafter65withanincrement of0*6%foreachextra
monthworked.
Asimpleexampleofthesecondisthestandard pensionpaidunder
thegeneralschemeforwage-andsalary-earners inFrance,whichmaybe
claimedatage60andamounts,inthatcase,to25%ofearnings.The
workersoonoerned mayrequestadeferment ,inwhichcasethebasic25%is
increased by1.25%foreaohquarter,or5%peryear:thus,thepension
risesfrom25%to30%ifitisolaimedat61,to50%at65,75%at"J0t
andsoon.
(l)Undermanyschemes.

-7-
These traditional rules may ,inboth cases ,beupset bytheintroduc­
tion ofearly retirement orbridging pensions into unemployment schemes .
However itmust beborne inmind that this flexibility gives rise
toaseries ofproblems inrespect ofitseffect ontheamount ofthe
pensions .Infaot ,the less effeot theagefactor has ontheamount of
pension paid ,themore attractive –andtherefore themore effective –
flexibility becomes .Ontheother hand ,itisobvious that freedom of
choice ispurely hypothetical iftheamount ofthepension which canbe
obtained atagiven age istoosmall ,since inthis case ,those concerned
aremore orless obliged toput offclaiming their entitlement .
ι
I
Real flexibility must besuoh astogrant real options tothose
concerned :either tooease their professional activity earlier orelse
topursue itifthey sowish ,Areal choice implies ofcourse ,that flexibility
cannot beused byanemployer toforce anemployee toretire ,
B) Within theframework oftraditional old–ageinsurance schemes ,
various formulas can beenvisaged :
1,Some oftheformulas involve varying theamount paid onthebasis
ofactuarial data alone .Thus ,theperson whoclaims hispension earlier
isnormally penalized ,ascompared with someone whoclaims itlater ,in
respect ofpension coefficients anddeferred retirement .This isthecase ,
forexample ,inSweden ,where theamount ofthepension isreduced by30ffo
ifclaimed at60instead of65,Similarly ,inBelgium ,retiring five years
early entails a25%outinpension .Such reductions are ,therefore ,any­
thing butnegligible , ' 1.
2,Ifthese provisions areapplied tothefull ,those whoaremost
inneed ofretiring earlier maywell give uptheidea .Itisawell-known
fact that thelife expectancy differs among thevarious social groups :
thus ,workers performing more arduous orrepetitive tasks have arelatively

lowlife expectancy .Theapplication ofactuarial factors should therefore
beadjusted byintroducing advantages designed tooffset their effects ,
3.Apart from this individual aspect ,itmust bepointed outthat
apension scheme based onactuarial principles andwhich istheoretically
unbiassed ,nonetheless encourages people toextend their working life .
Consequently another type offlexible system ,similar totheGerman one ,
canbeenvisaged ;this system alleviates theeffects ofearly retirement
ontheamount ofthepension bycalculating thelatter interms ofthe
number ofyears forwhich theperson hasbeen insured when heclaims pay 4-
ment ofpension ,aright which hemayexercise asfrom 63years ofage
(62incertain oases )without being penalized .
Tosumup«compared with rigid systems involving afixed retirement
age ,some idea ofleeway alongside acertain flexibility canbring about
real progress toindividual needs .Flexibility is,also ,likely tosettle
theproblem ofequal treatment formenandwomen asregards retirement age
inthose countries orunder those sohemes where that age isstj.ll atadiffe­
rent level forboth sexes .Infact this solution would enable theobjective of
equal treatment tobeattained with imposing anyrise intheageofretirement
forwomen ,which would goagainst therights which they have acquired aswell
asagainst thefreedom ofchoice ofthose concerned (l).
ÏI.PHASED RETIHEMENT
Fundamentally allschemes which subscribe totheidea of"phased "
retirement ,allseek toavoid anabrupt changeover from full–time work to
complete idleness ,with itspotentially disastrous consequence ofasudden
acceleration ofageing asshown bygeriatric studies .Thetraditional
definition of"retirement age"needs thus beradically changed since
(l)TheConference on"Equality forWomen "organised inManchester bythe
Commission from 28to30May I98O also recommended measures that would
promote aflexible retirement age .centred onaparticular age.

"phased "cessation ofwork would also entail that retirement isspread
over time .
Phasing ofretirement involves twosets ofproblems :
1.Those relating totheorganization ofthereduced working time .
Should such reduction beestablished asaright ?Orshould reliance be
placed quite simply oncollective agreements oronpressure forsocial
charge ?Ifthis reduction isrecognised asaright ,serious difficulties
could ensue intheorganisation ofsome undertakings .Ifconventional
agreements aretoberelied upon tdiscriminatory situations could arise
between salaried employees ofstrong andweak sectors ,
2,Those relating tocompensation forthe effects this reduction
hasonpay.Here ,twomain types ofarrangement with widely differing
philosophies andimplications areconceivable :
–either everything isleft totheundertaking ,which isresponsible
not only forarranging reduced working hours but also forthe
corresponding (full orpartial )financial compensation ;
–orelse theundertaking isresponsible only forthefirst ofthese
functions ,with thecost offinancial compensation being borne by
collective schemes ,under oldagepension entitlement forexample ,
A)Phased retirement arranged atundertaking level
1,Besides thetheoretical work done onthesubject ,anumber of
firms inFrance ,intheUKandinGermany have already launched phased
retirement schemes ,which differ inthefollowing ways :
–theway inwhich working time isshortened :longer holidays ,shorter
working week ,shorter day'swork ,etc,,and

-10-
–thefinancial implications .Insomecases(e.g.theGillette company
inFrance),thereisfullfinancial compensation andtheemployees
stiffernolossofwages;inothers,however ,areduction inhours
ofworkcarriesacorresponding cutinpay.Forinstance ,atthe
BritishLeylandMotorCorporation (UK)menover63andwomenover
58mayoptjforan&Cfforeduction oftheirnormalworkingtime,"but
theythenreceiveonlyBofoofnormalwages.
Naturally ,schemesinvolving partialcompensation arealsoto"be
found.
2..Itappears ,then,thatvirtually anytypeofschemecanbe
arranged withintheenterprise ,sincesuchmattersaresettledinfree
negociation betweenthetwosides. •
Thissuggests that,asthespecific constraints facingeach
enterprise andeachbranchofindustry canbesovariable andthewishes
oftheiremployees noless-diverse,theintroduction ofaphasedreduction
inworkingtimeshouldbeaprimeandtypicalsubjectfornegociation
betweenthetwosidesofindustry.Itisuptothemtointroduce theage
factorintosystemsofallocating workandpay(companyagreements or,as
inrecentcasesinGermany,inindustry-wide collectiveagreements"^).
Theintroduction ofthisfactorwouldaddanewdimension tocollective
bargaining .
B)Phasedretirement withlessofearningscoveredbyanold-agepension
scheme
Inthissecondcase,theshorterworkinghoursenjoyedbyolder
workersarereflected inthewagespaidtothembytheiremployer ,but
(l)Brewingandtobaocoindustries .

M»11M
theloss ofearnings iscompensated for "byanexternal source ,such as
anold-age pension orother colleotively funded scheme .
Thesimplest andmost attractive example ofsuch acompensation
arrangement isafforded bythe "partial retirement "scheme inSweden .
Under this system ,workers whohave been inwage–earning orsalaried
employment foratleast 10years since theageof45andwho ,after 60,go
onashorter working week (less than 35butmore than 17hours ),are
entitled toa"partial retirement pension "equal to65$oftheloss in
salary resulting from theswitch from full topart-time work .Inoome
taxscales are soprogressive inSweden that theactual rate ofcompensation
ismuoh higher interras ofdisposable income ;inactual fact where the
standard wage isconeerned >such 65%oftheloss ofearnings guarantees up
to90$ofincome .
Three questions areprompted bythis scheme :
a)itscost sacontribution rate initially of0.25$ ,nowtoberaised
to0.50$ ,ofwages issaid tobesufficient tocover it;
b)itsapplication :theworkers ooncerned have not (ornotyet)been
officially accorded aright tospecial arrangements over hours of
work .Itwould appear ,however –andhere wecome back tothe
principle ofbargaining between thetwosides ofindustry –that
significant social pressure from theunions would besufficient
towinover theemployers tosuch ascheme ;
c)itseffects onemployment :prompted bysocial rather than economic
considerations ,theSwedish partial retirement scheme seeks byits
gentle transition toretirement toimprove thesituation ofthe
elderly andnotthat ofthelabour market .
However ,improvements ofthis nature which are
being recommended toindustry could bring about acertain easing
oftheemployment situation .

«12
III.THEECONOMIC SITUATION
Theeconomiosituation can"beheededintwoways:
1)inarestrictive sense "byregulating thecumulation ofpensionandof
professional activityastheeconomicsituation demands;
2)inabroadersensebymeasuresencouraging "earlier"or"later"
retirement according totheemployment situation.
.A)Régulâtingcumulâtion
Averygeneralthesisshouldbetakenasabasisfordiscussion :
thehighertheretirement age,thelessprobableispensionlikelytobe
I
combinedwithincomefromwork.Theobvious ,reasonforthisisthat,in
theend,ageinevitably bringsaboutinabilitytowork:soonerorlater, j
butmoreoftenlater,theageingprocessmergeswithinvalidity. j
■■ I
Ontheotherhand,thelowertheretirement age,thegreaterthetendency j
tocumulatethispensionwithanoccupation titwouldbeperfectlypossible j
}
todrawapensionwhilststillbeingableandwillingtowork.Underfull j
employmentconditions ,combiningapensionwith'professionaloccupationis j
likelytobeeasilyacceptedbutwhenthereisunemployment suchwillnot I
j
bethecase. j
Itismorenatural(especially inthecontextofwork- .1
sharingmeasures)thatthedrawingofthepensionshouldhaveimplications , j
intheformofrestrictions oratotalban,fortheclaimant'soccupational j
aotivity-atleastforthosewhoapplyforretirement atanageearlier I
than"normal". !
f
ITherearethreemaintypeofimplications t j
1)Concurrent employment restricted byanoveralllimitonincome:this I
isthetypeofarrangement foundintheGermansystem.Ithasthe r
doubleadvantage ofnotexcludingpensioners totallyfromworkinglife -|
andallowing themtosupplement theirincome.Thedesiretoleaveroom
forindividual preference remainsuppermost .
2)Concurrent employment restricted byearningsbeingchargedagainst '■
thepension:thissystemismoreofadisincentive thantheprevious
I '
oneandthusimpliesmoreconcernforwork–sharingthanforthewishes j

-13-
ofpensioners ;however ,leaving aside theobvious danger ofmoonlighting ,
itpresupposes that thelevel ofthepension isnottoofar "below that
ofactual pay ,"otherwise those concerned will prefer tocontinue working
ifthey areable todoso.
3)Banonallgainful employment :this isthemost logical although at
thesame time themost radical solution ,iftheoverriding aimisto
Iremove thegroups offered flexible retirement fromthelabour market .
Itisthemethod adopted inthecase oftheearly retirement arrangements
introduced under unemployment insurance schemes .However ,given thefact
that early retirement only lasts afewyears ,itwill only beofa
temporary nature .
B) Thevarious observations regarding what happens inpractice lead to
amore general question :could the effect offlexibility onprofessional
activity beattuned tothe economic situation ?
'Iftheaimwere tosubordinate social security policy toemployment
policy attooshort aterm ,such anobjective would bevery much open -to
argument .
However itwould bequite feasible if,whilst respecting the
autonomous character ofsocial security policy ,account were taken ofthe
impact ofthese measures ,andinparticular oftheimpact ofphase retirement
onemployment .
Experience shows that theintroduction offlexible retirement would
very probably bring about retirement from working life andwould thus make
jobs ,occupied until then byolder workers ,available .
Taking this different economic impact into account ,temporary measures
ofencouragement ,taken within theframework ofemployment policy ,could be
envisaged inasituation ofcontinuing unemployment ,soastofavour (if
necessary )flexible retirement "enmasse "whilst regulating cumulation .
The jobs sovacated should however bemaintained asfaraspossible .Ontheother
hand ,inafull employment situation ,incentives would begiven toencourage
thecontinuation ofwork ,either onafull orpart-time basis .

14
Inthepresent situation ,various Member .States have hadtouse
financial measures topromote early retirement .Such interventions would
heless important with flexible retirement asthesystem already induces ina
zpermanent form/soijie earlier ageforretirement .Furthermore those interventions would
notmodify thegeneral guidelines ofretirement policy andthebenefioiaries
would feel neither privileged nor excluded .Moreover these temporary
intervention measures would bemore easily reversible iftheeconomic
situation were tochange .
With regard totheeconomic cost offlexible retirement andthe
problems associated with theestimation ofitscost please refer toAnnex II,
IV,CONCLUSIONS
TheCommission ,sifter consulting therepresentatives ofgovernments
andsooial partners onthese various solutions ,considers itself ina
position topropose "aCommunity approach based onthree guiding principles .
which canlead toamore coherent policy inthat field andwhich take into
account social aswell aseconomic objectives whilst respecting their
necessary autonomy .Ineffect ,ifthefirst twoproposals areprompted
solely byconsiderations ofsooial protection ,having regard both tothe "
aspirations ofindividuals andtotheobjective needs ofolder wox'kers ,
thethird proposal 'saim istobring into play acontingency correcting
factor which would permit theimplementation ofthefirst twoproposals
inthelight oftheeconomic situation andparticularly within theframe­
work ofarrangement ofworking time .These first twoproposals areinnoway
mutually exclusive .Onthecontrary ,from thesocial point ofview itwould be
desirable that they both beintroduced simultaneously orprogressively ,
1,Flexible retirement
Retirement ageisgenerally fixed bylaw ,andyetitdoes not'
necessarily correspond tothewishes ofoldworkers –some might wish to
stop working earlier whereas others might wish toco'^inue working beyond
that age.Moreover ,that agedoes notcater forthefact that ageing is
notauniform process :infaot itvaries according 'individuals said
according tooccupations .Furthermore ,when that aga isfixed atdifferent
levels formenandwomen ,ameasure ofunequal treatment between sexes is
introduced saidthis canberegarded asanunjustified discrimination .

/-15-
Theseinconveniences could "beremedied "bytheinstauration of
flexibleretirement :asfromacertainage(say60)anduptoamaximum
age,theworkerwouldhavetherighttoafreechoiceofretirement age
undersuchconditions thathischoiceisnotundulyinfluenced "bysignif­
icantdifferences intheamountsofpensions.
Themeansandwaysofimplementing thisprinciple canbevaried,
asisdemonstrated "bysuchnational schemesadoptedinfavourofoertain
sooialcategories aswellasthosewhichallowallandsundrytooptfor
retirement eitherearlierorlaterthannormalretirement age.Another
exampleispensiongrantedwhatever theageofthebeneficiary ,assoon
ashehasaccumulated acertainnumberofinsurance years.Thepointis
togeneralise thosestilllimitedapplications ofaprinciple whichought
toguidethefutureevolution ofthequestion ofretirement ageinlegal
aswellasinoccupational (complementary )schemes.
2,Phasedretirement
Retirement isgenerally accompanied byabrutalcessation of
professional activity andexpertsareallagreedthatthisabsenceof
transition betweenfull !timeactivity andtotalinactivity isextremely
harmfultothehealthofolderworkers.
Thisharmfulbreakcanbeavoidedbyphasedretirement :asfrom
acertainage,asmentioned above,theworkerwhodoesnotimmediately
retirewouldbeofferedareduction ofhisprofessional activity.Loss
ofearnings wouldbefinancially compensated foronewayortheotherbut
therighttosocialsecurity wouldbemaintained infull.Theworkerwho
doesnotavailhimselfofthisopportunity would,ontheotherhand,keep
therighttoworkparttimewhenheretires^*^In bothcases,thebrutal
cessation isavoided ,,
Itmustbepointedoutthatparttimeworkcanbeimagined tuider
variousmodes:inrelationtoafullday(halftime),toaweek(twoor
threedaysaweek)ortoayear(longerholidaysforexample).
(+)withapossiblenegativeeffectonunemployment .

/
-16-
3.Correcting mechanism
Flexibleretirement hasamoredirectimpactonemployment than
phasedretirement ,atleastintheshort-term.
Inviewofthisdifferent economic impact,employment policymeasures
could "betakenduringalimitedperiodoftimewhenunemployment persists ,
sothatflexibleretirement "enmasse"–thevacancies socreatedbeing
maintained –ispromoted byfinancial incitements .Ontheotherhand,when
thereisfullemployment ,onthecontrarystresswouldbeplacedmoreon
thecontinuation ofwork*
χ
X X
«
Thesethreegeneralguidelines havingbeendefined,therestill
remainsthedifficulty offormulating standardruleswhichreconcile the
socialconsiderations andeconomic constraints mentioned above.Inother
wordsitwillbepossible toimplement anyoftheguidelines adoptedin
different waysoncetheobjective hasbeendefinedatCommunity level.
Morepreciserecommendations could,innowayttakeintoaccountthe
varietyofdemographic ,economio,financial ,sociological ,psychological ,
historical andjudicialfactorsinvolved andtheywouldconsequently be
outofplace.Eachcountrymusttherefore lookforoptimumchoicesin
thelightofallthesefactors.
Thelegislation orthecollective agreements (withinindustries
orsectors),asthecasemaybe,shouldeventually gradually implement ~
flexible schemeswhichhavereceivedgeneralapproval.

/
APPENDIX 1
ECONOMIC AND FINANCIAL ASPECTS
OPEARLY RETIREMENT SCHEMES
BELGIUM
Atemporary "bridging pension scheme under collective agreement was
introduced ,limited atfirst in1975 "todismissed elderly workers but
extended bylawfrom 1976 "toelderly workers whoagreed toretire tomake
place fortherecruitment ofyoung workers .Under this scheme workers
aged 60(55in "thecase ofwomen )were guaranteed anincome equal tothe
unemployment benefit plus half thedifference between thelatter andtheir
net earnings subject toaceiling .Thescheme waslater extended to
rectify thesituation ofunemployed workers anddisabled persons aged 60.
Thebridging pension ceases when theperson concerned reaches theageat
which heisentitled tothestatutory pension .
Anestimated 63000persons have benefited under this scheme (2/3
ofwhom under thelegal scheme )and $ofooftheposts thus released have been
filled bytherecruitment ofnew staff .
Thecosts ofthestatutory bridging pension scheme were estimated at
Bfi 15f800million forcomplement of16,000 beneficiaries forawhole year and
12,000 beneficiaries forpart oftheyear (that istosayanaverage complement
of22,000 beneficiaries ).
BENMARK
InDenmark ,provision wasmade in1977 forearly retirement at55
years (thevisual ageisnoless than 67)forpersons encountering employment
orsocial difficulties .This wasfollowed in1979 *>y "theintroduction of
anearly retirement scheme forworkers aged 60ormore whovoluntarily
gave uptheir jobs .Theallowance represent ofaverage earnings over
2l/2years ,dropping toQCf/oforthenext 2years ,then to60$until
pensionable age.Thesystem hasmetwith unexpected success .
Initsfirst sixmonths ofoperation ,30000persons took advantage
ofthescheme ,that isone-third ofthetotal number ofpotential benef­
iciaries ;fortheyear asawhole ,;'thefigure should reach 40000.The
replacement rate isestimated at100^.

/
ν -2- APPENDIX I
Thecost ofthis system when infull operation isexpected tobe"
DKR 2600million .
/
FRANCE
In1972 ,tinder national collective agreement unemployment "benefit
forwage earners dismissed after theageof60wasraised toIQ/foofthe
last three months *salary .Under anagreement in1577 »thesystem was
extended tocover resignation where thebeneficiary ceases occupational
activity .Thestatutory reform oftheunemployment insurance system
maintains this provision inforce intheform ofsinincome support
("Allocation degarantie deressources ")although resignation isonly
covered until March 1981 .This measure applies until theperson concerned
reaches 65,
? •
In1978 |120000persons took advantage ofthescheme introduced
bytheagreements onearly retirement incases ofredundancy orvoluntary
resignation (thefigure isestimated at160000for1979 )»which represents
nearly 30^ofthetotal number ofpotential benef ioiaries .Therate of
replacement isbelieved tobelow.
In1978 "thecost ofthesystem amounted toPP4600million .
LUXEMBOURG
4
Inview ofthesteel crisis ,in1977 ^heGovernment decided toadopt
acompulsory early retirement system forelderly workers ,applying itfirst
tothis sector .These workers receive degressive tide–over allowances
(from 85$to70$ofearnings )forthethree years previous totheageat
which they qualify fortheearly retirement pension (62years formanual
workers ,60years formetal-workers andsalary earners ).Ontheother
hand ,they maynotpursue anyother activity .Thesystem ,designed to
cover the3years 1978-1980 ,hasbeen extended upto1982 ,
This system therefore affects allsteel workers ;thereplacement rate
iszero since the aim istoreduce the workforce .The total cost ofthe
system for 1070beneficiaries hasbeen estimated atLFr 1200million ,
NETHERLANDS
|
In1976 ,workers aged 60beoame entitled toreceive benefits foran
unlimited period ,ormore precisely until retirement age (65years ).Various

/
-J- APPENDIX I
experiments have "been carried outonatemporary "basis ,e.g. offering an
early retirement pension corresponding to80^ofearnings from theageof
63toelderly workers whoagree toretire :these schemes have "been
implemented inEducation ,Construction andMetalworking ,Ports' Services
andmore recently intheCivil Service .Atpresent early retirement would he
introduced in99 "branches ofemployment outof177.
Inthesectors concerned (exoluding theCivil Service ,where the
results arenotyetavailable )about 25%ofallpotential beneficiaries
have taken advantage ofthesystem .
Astudy onahypothetical voluntary early retirement scheme (entitle­
ment to80^ofearnings )assumes that such asystem could interest 50i°of
thepotential "beneficiaries ,andthat thereplacement rate forthe jobs thus
vacated would also "be50$.Financed "byemployers ,this scheme would release
55000jobs in1983 and75000in1985 ;thefigures would beslightly lower
\
ifthescheme were financed bywage andsalary earners .Thesystem could be
financed bycontributions from salaries ,paid either bytheemployees (0,2$)
orbytheemployers (0,4$ ).
UNITED KINGDOM • .
Under alawenacted in1977 »"Jobrelease scheme ",atemporary allowance
of£23perweek wasmade payable atage64(59in "thecase ofwomen )toworkers
leaving apost which could befilled byanunemployed worker .In1979 the
agewassubsequently lowered to62formen (60forthedisabled ),butit
wasreset at64in1980 forhealthy males .
Itisestimated that this scheme hasabsorbed 105000unemployed ,the
replacement rate being $6%,
\
Astudy hasshowa that iftheretirement agewere generally lowered
to60years ,assuming atwo-thirds replacement rate ,unemployment would drop
by200000inthefirst year and600000inthelong term 0Thegross cost
ofsuch areduotion would beabout £900 million peryear attheoutset ,
rising to£1800million inthefinal phase .Thecost (taking account of
theeffects onemployment )would beonly £1000million peryear ;however ,
thelong-term effects ofsuch asystem oninflation ,international competitivity
andnewunemployment areuncertain .

-4-
THE AVERAGE ANNUAL COST ,PERBENEFICIARY /
OF EARLY RETIREMENT SCHEMES
InNational Currency
COUNTRYTOTAL ANNUAL COST
PER YEARNUMBER OF'
BENEFICIARIESCOST PER
BENEFICIARY
BELGIUM (1978 ) 5,800 miIlion BFR
(*)22,000 264,000 BFR
DENMARK (1980 ) 2,600 miIlion DKR»
40,000 65,000 DKR
FRANCE (1978 ) 4,600 million FF 120,000 38,300 FF
LUXEMBOURG 400 miIlion LFR 1,070
V.373,000 LFR
RETHERLANDS Experience cannot beus
asitas itstems only 1edfor international cor
romvery fewsectors ^
Iupari son
UNITED KINGDOM
(1978 )23UKL
per week"
1,200 UKL
(*)Only thestatutory early retirement scheme .

APPENDIX XI
COST OFCERTAIN NATIONAL EXPERIMENTS
ONFLEXIBLE ORPHASED RETIREMENT
A.GERMANY
Workers mayopttoretire between 63and67years ofage ,ifthey
have been insured for35years ,
1.Number ofpersons retiring between theages of63and65(l)
1973 :85000
1974 :170000
1975 ::165000
1976 s165000
1977 :150000
Itisestimated that ,ofthose eligible forapension atage63,the
following actually claimed it :
lptj 60<joofinsured persons born inI90X
70%ofinsured persons born in1910
77 ofinsured persons born in1911
81$ofinsured persons born in1912
Thepercentage ofpension claims from persons aged between65and67
isnegligible .«Μ
(l)"Mitteilungen ausderArbeitsmarkt –undBeruf sforschung "
(Labour Market andVocational Research )
1979 no#1page 31»
«

\
-2-APPENDIX II
2.Cost ofthe measure in1976 Monthly cost
a)165000 (beneficiaries )xDM1100
(average monthly amount ofpensions
taken atage63) M 181 500000
b)Theamount saved onunemployment
"benefits asaresult ofpersons
pensioned offatage63being
replaoed byother workers should
bededucted from this sum .Itis
estimated (l)that theI65000
persons whobenefited in1976
freed jobs for 99000workers
(6<yforeplacement rate)#
Hence atheoretical saving of :
99000xM800 (average monthly
amount ofunemployment benefit ) DM-79200000
c)Real expenditure may ,therefore ,
beassessed atamaximum of : DM 102 300000
d)Anapparent oost of11100
(average amount ofpension )-
perbeneficiary per month thus
becomes areal maximum cost of
102 300 000
165000DM620 (2)
(l)Source :asabove •
(2)Similarly ,itmaybecalculated that a25%replacement rate (instead
of60$)would result inareal cost ofDM900perperson permonth .
Conversely ,a75%replacement rate would result inareal cost of
IM500permonth .

APPENDIX II
-3-
ROTS:Amoredetailed calculation shouldtakeintoacoount t
1)thelossoftaxessaidsocialinsurance contribu­
tionsbasedonsalariesforthefinaltwoyears
notworkedbeforetheageof65years(aloss
whichispartially compensated forbydeductions
madefrompensions);
2)thegainsontaxesandsocialinsurance contribu­
tionsfromthesalaries ofnewworkers whooccupy
thejobsthusvacated.
B.SWEDEN
•«
Wage-andsalary–earners whowishtoworkshorterhoursbetweenthe
agesof60and65obtainapartialpensionequivalent to65%oftheloss
ofearnings,
1-Numberofbeneficiaries
in1978 s44000
outofawage-andsalary-earning workingpopulation of200000persons
aged60to65«
Itisestimated thatwhentheschemebeoomesfullyoperative thisfigure
wouldriseto50000,oraquarteroftheworkforceinthecategory
affected - '
2.Costofthemeasurein1978
a)Totalannualexpenditure s 687000000Skr
(**about150milliondollars)
Revenue fromnational contributions
(0.25ofearnings) 403000Q00Skr

4-APPENDIX II
y.B,Thecontribution willberaisedto0.50/feofearnings
whichwillenableexpenditure tobebalanced.
b)Costofthemeasureperbeneficiary
permonth: 687000000 m_ιγοοΓχΊ;=
X
X X