Council conclusions

of 20 October 2003

on open coordination for adequate and sustainable pensions

(2003/C 260/02)

THE COUNCIL OF THE EUROPEAN UNION

RECALLING THAT:

(1) The European Council, in accordance with the integrated socio-economic strategy defined in Lisbon in March 2000 and in response to the first Joint Report by the Commission and the Council on Adequate and Sustainable Pensions, stressed the need for maintaining the momentum for cooperation in this area through continued application of the open method of coordination and called for further reforms focusing in particular on increasing employment rates for older workers.

(2) The need to accelerate the reform of pension systems with the aim of ensuring that they are both financially sustainable and meet their social objectives, also through a gradual increase by 2010 of about five years in the effective average age at which people cease work in the European Union, was especially underlined by the Barcelona European Council.

(3) The Joint Report by the Commission and the Council on "increasing labour participation and promoting active ageing" (March 2002) made a strong plea for a preventive and lifecycle approach in the framework of a comprehensive and integrated strategy to tackle the challenge of ageing populations and looked at all factors enabling people to enter the labour market and workers to remain longer at work.

(4) The Joint Report by the Commission and the Council on Adequate and Sustainable Pensions, having examined the various policies implemented by the Member States, underlined how balanced progress in addressing both social and financial concerns is the key to ensuring the political acceptability of pension reforms and invited Member States to maintain the impetus of the reform process and to implement credible and effective strategies; raising the effective retirement age and hence the employment rate for older workers represents a powerful tool for addressing both concerns.

(5) The future adequacy of pensions in some Member States also increasingly depends on the ability to earn sufficient supplementary pension rights, but this is made difficult for people who change jobs or interrupt their careers by conditions for the acquisition, preservation and transfer of occupational pension rights which may also represent major obstacles to the mobility of workers; the Commission has addressed a consultation document on this matter to the social partners.

(6) The Commission Communication "Strengthening the social dimension of the Lisbon strategy: streamlining open coordination in the field of social protection" proposed that the open method of coordination for pensions should be pursued after 2006 within a streamlined framework, on the basis of an evaluation of work undertaken in the different processes in the social protection domain, including that of pensions.

(7) The Opinion of the Social Protection Committee on streamlining strongly endorsed the objective of strengthening the social dimension of the Lisbon Strategy and stressed the need for continued public visibility of the different elements of the work developed to date on social protection policies, including on pensions; the Social Protection Committee has also invited the Commission to indicate how the mutual learning aspect of the open method of coordination can be reinforced in the area of pensions.

(8) Ways of improving and strengthening cooperation on pensions, based on the open method of coordination, were discussed during the Informal meeting of Employment and Social Policy Ministers in Varese on 11 July 2003,

THE COUNCIL OF THE EUROPEAN UNION

(1) UNDERLINES that the ageing of the population concerns all current Member States and acceding countries and that it is useful to promote a comprehensive and integrated approach to ensure adequate and sustainable pension provision in the future; it is also essential to develop policy responses to encourage present and future generations to remain active as they grow older.

(2) CONFIRMS that the setting up of adequate, sustainable and modern pension systems falls within the competence of national policies, but that this process can be supported by strengthened cooperation at European Union level based on the open method of coordination.

(3) REITERATES the particular importance of the objective of extending working life, in line with the Barcelona target, both as a contribution to the sustainability and adequacy of pension systems and as an integral aspect of the goal of increasing overall and specific employment rates in line with the Lisbon and Stockholm targets.

(4) UNDERLINES the importance for the Council (EPSCO) of taking a more active role in promoting coordination between employment and social policies, as part of the overall effort to achieve adequacy, financial sustainability and modernisation of pensions systems.

(5) UNDERLINES that the Social Protection Committee, where appropriate in cooperation with the Employment Committee and the Economic Policy Committee, should provide substantial support to the Council (EPSCO), in particular by carrying out specific studies focusing on common challenges for pension systems.

(6) WELCOMES the Commission's undertaking, in view of the 2004 Spring European Council and, if appropriate, the Tripartite Social Summit, to present a report on progress towards the Barcelona objective of raising the effective average age at which people stop working.

(7) UNDERLINES how essential it is to coordinate social protection, economic and employment policies and to continue, in the framework of the reform process, to focus a high level of attention on ensuring adequacy, alongside the financial sustainability and modernisation of systems.

(8) RECOGNISES the need also to modernise occupational pension schemes and notes that the Social Partners have been invited, on the basis of the Commission's consultation document under Article 138 of the Treaty on the portability of occupational pensions, to consider an approach to reducing obstacles to mobility.