WHITE PAPER An Agenda for Adequate, Safe and Sustainable Pensions
Date: 2012-02-16
Institutions: European Commission
Subjects: early retirement, population ageing, retired person, retirement conditions, supplementary pension

EUROPEAN COMMISSION 

Brussels, 16.2.2012  
COM(2012) 55 final 

WHITE PAPER 

An Agenda for Adequate, Safe and Sustainable Pensions 

(Text with EEA relevance)  

{SWD(2012) 7 final} 
{SWD(2012) 8 final} 

 
 
 
 
  
 
WHITE PAPER 

An Agenda for Adequate, Safe and Sustainable Pensions 

(Text with EEA relevance)  

1. 

INTRODUCTION 

An  ageing  population  presents  a  major  challenge  to  pension  systems  in  all  Member  States. 
Unless women and men, as they live longer, also stay longer in employment and save more 
for their retirement, the adequacy of pensions cannot be guaranteed as the required increase in 
expenditure  would  be  unsustainable.  By  2060,  the  life  expectancy  at  birth  for  males  is 
projected to increase by 7.9 years and by 6.5 years for females, when compared to 2010. And 
the problem is not far-off – it is upon us now as the baby-boomers retire and the working age 
population of Europe begins to shrink. This is reflected in an annual increase of around two 
million  people  aged  60+,  almost  twice  as  high  as  in  the  late  1990s  and  early  2000s.  By 
contrast,  the  number  of  people  of  prime  working  age  (20-59)  will  fall  every  year  over  the 
coming decades (Figure 1). 

Figure 1 Population change over the previous year, EU-27, 1996-2061 

20-59

60-69

60+

3.000.000

2.000.000

1.000.000

0

1996

2006

2016

2026

2036

2046

2056

-1.000.000

-2.000.000

Source: Europop 2010 and demo_pjangroup. 

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Together, longevity growth and the transition into retirement of the baby-boomers will have 
far-reaching economic and budgetary consequences in the EU, reducing the economic growth 
potential and exercising pressure on public finances.  

These prospects are further aggravated by the current financial and economic crisis. Sluggish 
economic growth, budget deficits and debt burdens, financial instability and low employment 
have  made  it  harder  for  all  pension  systems  to  deliver  on  pension  promises.  Pay-as-you-go 
pension schemes are affected by falling employment, and hence lower pension contributions. 
Funded schemes are affected by falling asset values and reduced returns.  

It  has  thus  become  more  urgent  than  ever  to  develop  and  put  in  place  comprehensive 
strategies  to  adapt  pension  systems  to  changing  economic  and  demographic  circumstances. 
The  challenges  are  massive,  but  surmountable,  provided  the  right  policies  are  put  in  place. 
Reforms  of  pension  systems  and  retirement  practices  are  essential  for  improving  Europe’s 
growth prospects, and they are urgently required in some countries as part of current actions 
to restore confidence in government finances. 

As the economies and societies of the Member States are becoming more and more integrated, 
the success or failure of national pension policies and reforms has ever stronger repercussions 
beyond  national  borders,  particularly  in  the  Economic  and  Monetary  Union.  The  central 
importance  of  pensions  for  Europe’s  social  and  economic  success  and  the  increased  risk  of 
cross-border  spill-overs  from  national  pension  policies  mean  that  pensions  are  increasingly 
becoming a matter of common concern in the EU. Indeed, the success of retirement reforms in 
the Member States is a major determining factor for the smooth functioning of the Economic 
and Monetary Union, and will affect the EU’s ability to achieve two of the five targets of the 
Europe 2020  Strategy  –  raising  the  employment  rate  to  75%  and  reducing  the  number  of 
people at risk of poverty by at least 20 million.  

This White Paper reflects these common concerns about problems in our pension systems and 
sets out an agenda for making pensions adequate and sustainable in the long term, by creating 
the  conditions  for  a  high  level  of  labour  force  participation  of  women  and  men  throughout 
their lives and enhancing the opportunities to build up safe complementary retirement savings. 
It suggests forward policy orientations and initiatives at the European level through which the 
EU can support national policy makers in their efforts to address reform needs, notably those 
highlighted in the Annual Growth Surveys 2011 and 2012 and specified in the 2011 country-
specific recommendations.  

This  White  Paper  also  reflects  the  results  of  the  wide-ranging  consultation  launched  by  the 
Green Paper Towards adequate, sustainable and safe European pension systems1. Hundreds 
of  stakeholders,  as  well  as  the  European  Parliament,  the  European  Economic  and  Social 
Committee  and  the  Committee  of  the  Regions,  have  responded  to  this  paper  and  expressed 
their expectation for pension issues to be addressed at the EU level in a comprehensive and 
coordinated way.  

2. 

THE CURRENT PENSION CHALLENGES 

The sustainability and adequacy of pension systems depends on the degree to which they are 
underpinned  by  contributions,  taxes  and  savings  from  people  in  employment.  Financing 

1 

COM(2010)365 final, 7 July 2010. 

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arrangements, eligibility conditions and labour market conditions must be calibrated such that 
a  balanced  relation  between  contributions  and  entitlements,  and  between  the  number  of 
actively employed contributors and the number of retired beneficiaries, can be achieved.  

2.1. 

Securing the financial sustainability of pension systems 

Pensions represent a very large and rising share of public expenditure: more than 10% of GDP 
on average today, possibly rising to 12 ½ % in 2060 in the EU as a whole2. But with spending 
on public pensions ranging from 6% of GDP in Ireland to 15% in Italy today, countries are in 
rather different situations although they face similar demographic challenges.  

In the last decade, there has been considerable progress in reforming pension arrangements. A 
majority  of  Member  States  have  adapted  pension  systems  so  as  to  put  them  on  a  more 
sustainable footing and enable them to weather the demographic changes that are set to take 
hold. This has been implemented through reforms that aimed to make the parameters of the 
systems  consistent  with  fiscal  sustainability,  or  through  structural  reforms  such  as  shifting 
from  defined  benefit  (DB)  to  defined  contribution  (DC)  schemes  or  establishing  mandatory 
funded pillars. 

However, further reforms are in many cases necessary and the financial and economic crisis 
has  made  the  demographic  changes  harder  to  cope  with,  as  well  as  highlighting  further 
weaknesses in some pension systems. So further adjustments on the expenditure side will be 
unavoidable  in  many  Member  States  together  with  enhanced  efforts  to  boost  employment 
rates and productivity. A credible fiscal strategy needs to be rigorously implemented in line 
with the fiscal framework in the Stability and Growth Pact, taking due account of the net cost 
of  implementation  of  a  pension  reform.  Regarding  the  challenge  of  population  ageing,  the 
Stockholm European Council defined a three-pronged strategy in 2001, comprising: (i) public 
debt  reduction,  (ii)  increasing  employment,  notably  of  older  workers,  and  productivity  and 
(iii) reforming social security systems. Recently, the three-pronged strategy to cope with the 
challenge posed by ageing populations was enriched in the context of the overall Europe 2020 
strategy,  while  the  2010  Green  Paper  on  Pensions  launched  a  debate  on  a  comprehensive 
approach in view of delivering adequate sustainable and safe retirement incomes. 

2.2.  Maintaining the adequacy of pension benefits  

Pensions – mostly from public schemes – are the main source of income of older Europeans, 
who are a significant and growing part of the EU population (120 million or 24%). Indeed, the 
basic purpose of pension systems is to deliver adequate retirement incomes and to allow older 
people to enjoy decent living standards and economic independence and pensions also play a 
role  as  automatic  stabilisers.  Broadly  speaking,  this  has  been  achieved  across  the  EU, 
although important gaps remain. People over 65 have an income of almost 94% of that of the 

2 

Up-to-date long-term projections of public pension expenditure currently under preparation by the EC 
and the EPC are envisaged to be released in the 2012 Ageing Report in May 2012. The values refer to 
initial estimates. These suggest that additional recent reforms undertaken since the release of the 2009 
Ageing Report in a number of Member States have successfully curtailed future spending increases on 
pensions. 

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average for the total population3, yet about 22% of women over the age of 75 fall below the 
at-risk-of-poverty threshold4. 

While  recent  public  pension  reforms  have  tended  to  improve  or  maintain  their  poverty 
protection, most of these reforms will result in lower replacement rates (pensions relative to 
previous earnings) in the future (Figure 2). 

Figure 2: Projected change in replacement rates of statutory and supplementary pension schemes between 
2008 and 2048 (in pp.) 

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Change in gross replacement rates between 2008-2048 owing to total Statutory pension schemes (percentage
points change) 

Change in gross replacement rates between 2008-2048 owing to Occupational and other supplementary pension
schemes (percentage points change)

Source: Social Protection Committee Indicator Sub Group (ISG) exercise on 2008-2048 theoretical replacement 
rates 

The  expected  reduction  in  replacement  rates  is,  however,  based  on  the  assumption  of  an 
unchanged retirement age. Working to a higher age may help maintain or even increase the 
future  level  of  replacement  rates.  This  effect  is  illustrated  in  Figure  3  which  compares  the 
gross replacement rates received by people retiring currently at 65 after a 40-year career with 
replacement rates of people retiring at a higher age (67, after a 42-year career with all other 
elements assumed alike) in the future (Figure 3).  

3 

4 

Eurostat, EU-SILC data for 2009. Equivalised mean income of people aged 65+ as % of mean income 
of the total population in EU27. Across Member States, the level varies between around 70% and just 
over 100%. 
Eurostat, EU-SILC data for 2009. 

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Figure 3 Projected impact of longer working on change in replacement rates between 2008 and 2048 

Projected impact on gross replacement rates of working longer in the future, 
change in p.p.

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-5

-15

-25

IE

S E F R P T P L MT C Z E L

F I

IT

LU LV S K U K H U E S

LT D E B E N L D K AT E E C Y S I B G R O

Difference in Gross Theoretical Replacement Rates p.p. after a 40 years career (retirement at 65) and retiring in 2048 compared to same career
length w ith retirement in 2008

Difference in Gross Theoretical Replacement Rates p.p. after a 42 years career (retirement at 67) and retiring in 2050 and a 40 years career
(retirement at 65) and retiring in 2008 (for EL: 2006 and 2046 are the relevant years)

Source: ISG exercise on 2008 – 2048 theoretical replacement rates 

Complementary  retirement  savings  can  also  help  secure  adequate  replacement  rates  in  the 
future5. Some countries have introduced measures to complement their public pay-as-you-go 
pension  schemes  with  private  funded  schemes,  but  there  is  much  scope  for  further 
development of complementary pension savings opportunities in many Member States. This 
would  require,  though,  that  funded  private  pension  schemes  become  safer  and  more  cost-
effective, as well as more compatible with flexible labour markets and mobility. 

In  some  countries  the  crisis  clearly  demonstrated  that  the  ability  of  pre-funded  pension 
schemes  to  mitigate  risks  and  absorb  shocks  needs  to  be  improved.  The  recession  and  the 
subsequent deterioration of public finances also revealed some weaknesses in the way some 
Member States had sought to build mandatory private pension schemes.  

2.3. 

Raising the labour market participation of women and older workers 

The  ageing  challenge  is  often  illustrated  by  the  doubling  of  the  old  age  dependency  ratio 
(population 65+ to population 15-64) from 26% in 2010 to 50% in 2050. Yet the real issue is 
the economic dependency ratio, defined as the unemployed and pensioners as a percentage of 
the employed. If Europe achieves the employment goal of the Europe 2020 strategy of 75 % 
employment rate in the age group 20-64 and further progress is made in the period 2020-2050 
the economic dependency ratio will only increase from the current level of 65 % to 79 % in 
2050.6  

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6 

Complementary retirement savings include occupational and personal pensions, life insurance and other 
forms of asset accumulation that can be used to maintain living standards after retirement. In addition, 
there  are  instruments  (e.g.  reverse  mortgages) which  enable  people  to  convert  assets  (in  general  their 
home) into an additional retirement income. 
Calculation  based  on  the  Dependency  Ratio  Calculator  of  the  Austrian  Federal  Chamber  of  Labour, 
Vienna.  The  economic  dependency  ratio  is  defined  as  number  of  pensioners  (incl.  early  retirement, 
disability) and unemployed relative to the number of people in employment. Main assumption for 2050: 
rise of the employment rate in the age group 20-64 to 79.6 % (such an employment level was achieved 

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Many countries have considerable scope for improving the future adequacy and sustainability 
of  their  pension  systems  by  raising  employment  rates,  and  this  not  just  in  the  higher  age 
groups,  but  also  for  groups  with  lower  employment  rates  such  as  women,  migrants  and 
youths.  Reaching  the  EU  employment  target  or  catching  up  with  the  best-performing 
countries could almost neutralise the effects of population ageing on the weight of pensions in 
GDP. 

Pension  systems  influence  retirement  patterns,  and  hence  the  supply  of  labour  and  the 
economic dependency ratio. Key parameters are the normal and early pension eligibility ages. 
Currently,  about  one  third  of  adult  life  is  spent  in  retirement  and,  with  unchanged  policies, 
this share would increase in line with future gains in life expectancy. Moreover, early labour 
market exit pathways result in employment rates of older workers (aged 55-64) below 50% in 
2010 in the EU. But this aggregate figure for the EU masks large differences across Member 
States,  ranging  from  30.2%  in  Malta  to  70.5%  in  Sweden  (see  Figure  4).  Also,  the 
employment rates of older women (38.6%) are significantly below those of men (54.6%).  

The  trend  in  recent  decades  towards  earlier  retirement  has,  however,  been  reversed.  The 
employment rate of the 55-64 age group increased in the EU-27 from 37.7% in 2001 to 46.3% 
in 2010. Moreover, pension reforms already adopted in Member States, which will often be 
phased  in  over  time,  could  result  in  significant  increases  in  participation  rates  of  older 
workers. But more needs to be done. Labour force participation is currently still too low in the 
age groups just below the retirement age and progress too limited. A fixed retirement age in 
combination  with  easy  early  labour  market  exit  options  will  create  growing  imbalances 
between  active  years  and  years  in  retirement.  Reforming  pension  systems  to  increase  the 
labour market participation rate will be crucial to enhance economic growth and to lay a solid 
foundation for sustainable and adequate pensions. 

The success of reforms aimed at increasing pension eligibility ages (including by phasing out 
early  retirement  schemes)  depends,  however,  on  better  opportunities  for  older  women  and 
men  to  stay  in  the  labour  market.  This  includes  the  adaptation  of  work  places  and  work 
organisation, the promotion of lifelong learning, cost-effective policies aiming at reconciling 
work,  private  and  family  life,  measures  to  support  healthy  ageing  and  combating  gender 
inequalities  and  age  discrimination.  Moreover, the  political  acceptance  of  such  reforms  will 
depend on whether they are perceived as fair. This requires taking into account the fact that 
the ability to work – and to find employment – differs widely between individuals, and that 
life  expectancy  and  health  status  at  age  60  or  age  65  tends  to  be  lower  for  manual  workers 
who started working at a young age.  

2008 

in 
three 
Data: Labour Force Survey, Ageing Report 2009, Europop 08. 

performing 

best 

the 

in 

countries 

- 

SE, 

DK, 

NL).  

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Figure 4 Employment rates of older workers (55-64) in the EU Member States in 2010 

Source: ESTAT 

2.4. 

The role for Member States and EU in pensions 

Member States have the primary responsibility for designing their pension systems according 
to  their  circumstances.  Nevertheless,  the  Treaty  on  the  Functioning  of  the  European  Union 
requires  the  EU  to  support  and  complement  the  activities  of  the  Member  States  on  social 
protection  (Article  153)  and  to  take  into  account  adequate  social  protection  in  defining  and 
implementing its policies (Article 9).  

Many EU competences and policy initiatives affect national pension systems and policies. So 
far,  the  EU  has  been  addressing  very  specific  issues  related  to  pensions  in  a  somewhat 
fragmented  way,  such  as  removing  obstacles  to  the  free  movement  of  people,  defining  how 
private  pension  providers  can  benefit  from  the  Internal  Market,  promoting  gender  equality, 
combating  discrimination  and  monitoring  fiscal  sustainability.  Given  the  magnitude  and 
interrelated  character  of  the  macroeconomic,  social  and  employment  challenges  related  to 
pensions, it is necessary to take a more comprehensive approach. 

The EU has a wide range of policy instruments to support Member States achieve adequate 
pensions on a sustainable basis. In the Green Paper on Pensions in 2010, the Commission has 
underlined  the  importance  of  tackling  pension  issues  in  a  holistic  way  and  optimising 

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synergies  across  policy  areas.  The  Europe  2020  strategy  and  the  strengthening  of  economic 
governance  at  European  level,  provide  a  stronger  framework  within  which  to  critically 
examine  pension  systems.  This  acknowledges  that  pensions,  which  play  a  vital  role 
supporting many EU citizens, are also one of the largest public expenditure items and hence 
an issue of common concern amongst Member States. In addition to close cooperation with 
Member State governments (notably in the Social Protection Committee, SPC, the Economic 
Policy Committee, EPC  and the  Employment  Committee,  EMCO), it is  important to  ensure 
that  other,  non-governmental  stakeholders  can  participate  in  discussion  on  how  to  achieve 
adequate, sustainable and safe pensions. 

This White Paper respects the responsibilities of the Member States. It aims to gear EU policy 
instruments  towards  offering  better  support  to  pension  reform  efforts  in  the  Member  States 
and proposes a set of mutually reinforcing initiatives, ranging from legislation over financial 
incentives  to  policy  coordination  and  monitoring  progress  towards  shared  objectives  within 
the integrated and comprehensive Europe 2020 framework. 

3. 

THE NEED FOR PENSION REFORMS 

The challenge for pension policies is to put in place a system that is financially sustainable so 
that the basic purpose of pension systems, namely to deliver adequate retirement incomes and 
to  allow  older  people  to  enjoy  decent  living  standards  and  economic  independence,  can  be 
achieved.  

The  Commission’s  20117  and  20128  Annual  Growth  Surveys  (AGS)  highlighted  key 
orientations for pension reforms which contribute to growth-friendly fiscal consolidation and 
will  ensure  adequate  and  sustainable  pensions.  To  achieve  these  objectives,  the  AGS 
emphasised the relevance of securing a better balance between years spent working and years 
in  retirement  and  of  promoting  complementary  retirement  savings.  More  specifically  the 
Commission recommended to:  

(a) 

(b) 

(c) 

(d) 

(e) 

link the retirement age with increases in life expectancy;  

restrict access to early retirement schemes and other early exit pathways;  

support  longer  working  lives  by  providing  better  access  to  life-long  learning, 
adapting  work  places  to  a  more  diverse  workforce,  developing  employment 
opportunities for older workers and supporting active and healthy ageing;  

equalise the pensionable age between men and women; and,  

support the development of complementary retirement savings to enhance retirement 
incomes.  

Successfully  implementing  pension  reforms  along  these  lines  will  contribute  to  putting  the 
pension  systems  on  a  more  sustainable  path  and  thereby  help  Member  States  to  offer  their 
citizens adequate incomes in old age even in a much less favourable demographic context. 

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COM(2011) 11 final, 12.1.2011. 
COM(2011) 815 final, 23.11.2011. 

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Significant  progress  in  reforming  social  security  in  line  with  the  recommendations  of  the 
Annual Growth Surveys has been made in several countries (most recently in CZ, EL, ES and 
IT, see Annex 3 for recent pension reforms). Nonetheless, more policy action is needed, and is 
needed  now.  The  necessary  components  of  successful  reforms  in  accordance  with  the  AGS 
are sketched out below. 

3.1. 

Balancing time spent in work and retirement 

3.1.1.  Linking retirement age to gains in life expectancy 

The  country-specific  recommendations  on  pensions  adopted  in  July  2011  focus  strongly  on 
the  need  to  keep  older  workers  longer  on  the  labour  market,  notably  by  raising  the 
pensionable  age  and  linking  it  to  gains  in  life  expectancy.  In  the  first  instance,  increasing 
effective  retirement  ages  would  compensate  to  some  extent  for  the  earlier  longevity  growth 
which  has  not  been  factored  into  pension  calculations.  Linking  the  pensionable  age  to  life 
expectancy  could  then  help  stabilise  the  balance  between  working  years  and  years  in 
retirement.  This  is  of  key  importance  for  future  sustainability.  Simulations  in  the 
Commission's  2009  Sustainability  Report  suggest  that  increasing  the  retirement  age  in  line 
with future gains in life expectancy could result in budgetary savings representing more than 
half of the projected increase in pension expenditure over the next 50 years9.  

Some Member States try to achieve later retirement by increasing the number of contribution 
years required to obtain a full pension or by linking it to gains in life expectancy (e.g. CZ, EL, 
FR, IT). Others link the level of pension benefits to life expectancy gains (e.g. PT), while a 
few tie benefit levels to the financial balance of the pension scheme (e.g. DE, SE), which will 
be  affected  by  demographic  change  and  rising  life  expectancy.  Most  Member  States  offer 
some opportunities to earn a higher pension by working longer, allowing them to compensate 
for the declining value of pensions at a given retirement age, thereby preserving the adequacy 
of their pensions. 

Raising  the  effective  retirement  age  will  not  be  about  pitching  the  interests  of  the  young 
against  those  of  the  old  but  finding  the  right  balance  between  them.  Staying  active  during 
some of the extra life years gained does not mean that older people are being deprived of their 
well-deserved retirement for the benefit of the young. Neither does it mean that older workers 
will keep jobs that would otherwise be available to younger workers. Indeed, those Member 
States  with  the  highest  employment  rates  for  older  workers  also  have  some  of  the  lowest 
youth unemployment rates. Over the longer run, the number of jobs is not fixed, but depends 
notably  on  the  supply  of  qualified  workers,  which  is  a  key  driver  of  economic  growth.  The 
increased  availability  of  experienced  older  workers  will  enhance  Europe’s  growth  potential 
and  thus  create  more  opportunities  and  better  living  conditions  for  the  young  and  the  old. 

9 

Estimates reveal that by linking the retirement age to life expectancy the public pension expenditure to 
GDP ratio in the EU as a whole would be about 1.75 p.p. of GDP lower by 2060 compared with the 
baseline scenario where the projected increase in public pension expenditure to GDP ratio is calculated 
to 2.4 p.p. of GDP. Hence, raising the pensionable age and the effective retirement age to automatically 
reflect gains in future life expectancy would contribute very substantially to ensuring progress towards 
fiscal  sustainability.  European  Commission  and  Economic  Policy  Committee  (2009),  "2009  Ageing 
Report:  Economic  and  budgetary  projections  for  the  EU-27  Member  States  (2008-2060)",  European 
Economy, No 2.and European Commission (2009), "2009 Sustainability Report", European Economy, 
No 9. 

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Offering better opportunities for people of all ages will be at the heart of the 2012 European 
Year for Active Ageing and Solidarity between Generations. 

3.1.2.  Restricting access to early retirement 

Pension reforms aimed at keeping people longer on the labour market also need to focus on 
removing  unwarranted  early  retirement  options  which  may  apply  to  all  employees  or  to 
specific professions.  

In  some  Member  States,  the  statutory  pension  system  allows  people  with  full  contributory 
periods  to  retire  before  the  standard  pensionable  age  (e.g.  AT,  BE  and  LU).  Thus,  pension 
reforms should not focus only on increases in pensionable ages, but also, where relevant, on 
the  length  of  contributory  periods,  which  also  need  to  reflect  increasing  life  expectancy. 
Taking  into  account  contributory  periods  (even  if  the  required  length  rises  in  line  with  life 
expectancy) allows pension systems to offer fairness to people who started their careers early 
(usually unskilled workers who will often have a lower life expectancy and worse health).  

Member  States  reform  their  early  retirement  schemes  in  different  ways.  Employers  may  be 
required  to  bear  all  or  at  least  a  significant  share  of  the  costs  of  early  retirement  benefits. 
Workers  in  particularly  arduous  or  hazardous  jobs  can  be  offered  alternatives  to  early 
retirement, such as job mobility. In some Member States, eligibility rules are being tightened 
–  for  instance  by  increasing  the  eligibility  age.  Some  countries  are  also  either  reducing  the 
levels  of  benefits  provided  by  special  schemes  or  closing  these  schemes.  Whenever  early 
retirement options are eliminated, it is important to ensure that the individuals concerned are 
enabled to work longer or, if this is not possible, can enjoy adequate income security. 

3.1.3. 

Supporting longer working lives 

Phasing out early retirement schemes and raising pensionable ages must be accompanied by 
measures that enable people to stay longer on the labour market through appropriate health, 
work place and employment measures. In the absence of these, the impact on public finances 
could be much less beneficial if such reforms targeting pension ages would lead to an increase 
in  the  numbers  of  people  relying  on  other  types  of  benefits  (e.g.  unemployment,  invalidity, 
social  assistance).  Alternatively,  savings  for  public  budgets  could  result  from  older  workers 
receiving  reduced  pensions  if  they  are  unable  to  remain  in  employment  until  the  normal 
retirement age. This would result in a higher risk of poverty in old age.  

Genuine dialogue in the Member  States,  bringing  together governments, social partners and 
other stakeholders to build consensus on policies that create opportunities for working longer, 
whilst also ensuring solidarity with those who are unable to do so, will be essential to secure 
the future adequacy and sustainability of pensions. It will also be important to explain that, as 
life expectancy rises, working longer does not imply that people will be enjoying fewer years 
of retirement. 

A factor of great importance is the health status of people close to the retirement age, as this 
affects the ability and willingness of people to continue working with consequent impacts on 
the labour market. Investing in the prevention of diseases, the promotion of healthy and active 
ageing  and  in  more  cost-effective  health  systems  are  important  to  maintain  and  maximise  a 
healthy and productive workforce which can continue to work later in life. In turn, this will 
help reduce early retirement caused by illness, contribute to increase the labour participation 
of people over 55 and ease some pressure on pensions. 

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Further measures include revising unwarranted mandatory retirement ages, promoting health 
and safety at work, providing access to life-long learning, adapting work places to the needs 
of  older  workers  and  developing  opportunities  for  flexible  working  arrangements,  e.g.  by 
combining part-time work and partial pension receipt. There is scope for developing 'second 
careers' and suitable 'end-of-career' jobs. Removing disincentives to employment and longer 
working  lives  for  women  and  men  in  tax-benefit  and  remuneration  systems  will  also  be 
important.  Given  the  significant  differences  in  employment  rates  for  women  and  men  aged 
55-64, all initiatives will have to pay particular attention to gender aspects of longer working 
lives and active ageing, including measures that facilitate the reconciliation of work and care 
responsibilities  and reduce  gender  gaps in employment and pay.  The  European  Social Fund 
(ESF) can play an important role in bolstering the capacity of policy makers, employers and 
workers  to  remove  barriers  for  women  and  to  longer  working  lives  and  bring  about  the 
progress needed to boost the employability of older workers of both genders. 

3.1.4.  Closing the pensions gap between men and women 

Thirteen  Member  States  still  had  lower  pensionable  ages  for  women  than  for  men  in  2009. 
However,  based  on  current  legislation  in  place,  eighteen  of  the  Member  States  will  have 
equalised  the  pensionable  ages  by  2020.  Five  Member  States  have  longer  term  plans  to 
equalise pension ages and only four out of the 27 Member States have no legislation in place 
to  do  so(see  Annex  3  for  country-specific  details).  Equalising  pensionable  ages  for  women 
and men can make a significant contribution to raising the labour force participation of older 
workers and contribute to improving income for women and should be implemented without 
delay.  

The equalisation  of  pensionable  ages needs to be considered in  the wider  context of  gender 
disparities  in  pensions  resulting  from  differences  between  women  and  men  in  employment, 
pay,  contributions  and  career  breaks  and  part-time  working  for  caring  purposes.  This 
persistence of gender inequalities on the labour market leads to lower pension entitlements for 
women. Addressing pension adequacy and sustainability therefore requires a mix of pension 
and  employment  policies  aimed  at  tackling  gender  differences  in  pension  incomes.  More 
effective solutions that are not based on the presumption of specific gender roles are required, 
such  as  care  credits  that  are  available  to  both  women  and  men  and  that  preserve  the 
sustainability of pension systems including by facilitating the return to work. 

Addressing gender inequalities by facilitating the reconciliation of work and private life can 
also  have  long-term  indirect  benefits  for  pension  systems  by  making  it  easier  for  people  to 
raise a family, thus raising birth rates and mitigating the long-term decline in the working-age 
population. 

3.2. 

Developing complementary private retirement savings  

Complementary retirement savings have to play a greater role in securing the future adequacy 
of  pensions,  so  Member  States  will  have  to  find  ways  of  improving  the  cost-effectiveness, 
safety  and  equitable  access  to  supplementary  pension  schemes.  Tax  and  other  financial 
incentives, as well as collective bargaining play an important role here. These tools are being 
used in very different ways across the EU, so there is considerable scope for mutual learning. 
Addressing gender equality aspects will also be crucial in order to avoid widening the existing 
gender  gaps,  as  women  currently  have  fewer  opportunities  to  build  up  supplementary 
retirement savings than men.  

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The crisis has highlighted the vulnerability of funded pension schemes to financial crises and 
economic downturns. It has also emphasised the need to review the regulatory framework and 
scheme design to improve the safety of private pensions. The EU has legislative competences 
in  this  area,  and  two  instruments  are  already  in  place:  the  Directive  on  the  protection  of 
employees in the event of insolvency of their employer10 and the Directive on the activities 
and supervision of Institutions for Occupational Retirement Provision (IORP)11 . The Green 
Paper  consultation  has  confirmed  that  the  Single  Market  is  a  key  instrument  to  support 
pension  adequacy  and  fiscal  sustainability.  There  is  untapped  potential  to  realise  further 
efficiency  gains  through  scale  economies,  risk  diversification  and  innovation.  The  EU  can 
strengthen  its  framework  to  support  occupational  retirement  provision  within  the  overall 
pension system of Member States and to contribute to the reduction of the cost of pensions. 
This  is  why  the  IORP  Directive  will  be  reviewed  with  the  aims  of  further  facilitating  the 
cross-border  activity  for  IORPs  and  modernising  their  supervision,  taking  into  account  the 
different types of IORP in Member States. In addition, there is a need to improve the quality 
of financial products for individual retirement savings not linked to employment, such as third 
pillar  schemes  and  other  financial  products  used  to  supplement  the  incomes  of  the  elderly. 
Improving  consumer  information  and  protection  is  necessary  to  enhance  workers'  and 
investors' confidence in financial products for retirement savings.  

An  increased  reliance  on  supplementary  pension  schemes  could  result  in  people  who  move 
across borders losing a significant portion of their pension entitlements. Their statutory social 
security  entitlements  are  guaranteed  by  EU  legislation  (in  particular  Regulation  (EC)  No 
883/200412),  but  private  schemes  are  outside  the  scope  of  this  Regulation.  It  is  therefore 
important  to  adopt  measures  that  prevent  supplementary  pension  schemes  from  being 
obstacles  to  professional  mobility  and  labour  market  flexibility,  which  can  make  a  direct 
contribution  to  increasing  economic  growth  in  the  EU,  without  adversely  impacting  the 
overall provision of supplementary pensions. 

Citizens  working  in  another  Member  State  not  only  need  to  preserve  pension  entitlements 
accrued  across  borders.  They  also  need  to  have  a  clear  overview  of  their  accrued  pension 
rights  stemming  from  statutory  and  occupational  pension  schemes.  This  could  be  achieved 
through  the  establishment  of  pension  tracking  services  across  the  EU  similar  to  those  that 
already  exist  in  some  Member  States.  Tracking  services  can  provide  citizens  with  accurate 
and up-to-date information about pension entitlements, as well as projections of their income 
after retirement from statutory and occupational pension schemes. Thus they can demonstrate 
the  benefits  of  working  longer  and  of  making  complementary  retirement  savings  so  as  to 
maintain  an  adequate  income  after  retirement.  With  a  minimum  harmonisation  of  key 
features,  tracking  services  at  the  national  level  could  be  connected  into  an  EU  system  of 
tracking services. 

4. 

DEPLOYMENT OF EU INSTRUMENTS 

With  national  pension  policies  becoming  increasingly  a  matter  of  common  concern,  it  is 
logical that the role of the EU in helping Member States achieving the goals of adequate and 
sustainable pensions becomes more important. 

10 
11 
12 

2008/94/EC of 22 October 2008. 
2003/41/EC of 3 June 2003. 
Regulation 883/2004/EC of 29 April 2004 on the coordination of social security systems. 

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The EU can harness a range of policy instruments to promote adequate, safe and sustainable 
pensions, even though the main responsibility for achieving these goals clearly remains with 
the Member States.  

Legislation: The EU has no powers to legislate on the design of pension systems as such in 
the  Member  States,  however  it  can  legislate  on  matters  that  affect  the  functioning  of  the 
internal  market  (free  movement  of  persons,  freedom  to  provide  services,  protection  of 
consumers), to tackle discrimination (on the grounds of gender and age, in particular), and to 
protect workers' rights. A number of regulations and directives that affect pension schemes in 
the Member States are already in force. In addition, the EU can promote ‘soft law’ measures 
such as codes of good practice.  

Funding: The EU can also mobilise funds to achieve certain policy goals related to pensions. 
The European Social Fund is by far the most important European tool for this purpose and can 
be  used  to  promote  the  employability  and  labour  market  opportunities  for  older  workers. 
Various  smaller  funding  instruments  exist  in  policy  areas  such  as  employment  and  social 
policy  (PROGRESS),  public  health  and  life-long  learning  and  can  be  used  to  support  the 
development of better policies in the Member States, notably through mutual learning.  

Policy coordination: Europe 2020 entails a stronger coordination of national policies in the 
context  of  the  European  Semester,  using  in  particular  the  instrument  of  Country  Specific 
Recommendations. This process is underpinned by the work of policy committees such as the 
EPC,  SPC  and  EMCO  which  examine  in  detail  specific  challenges  related  to  pensions 
adequacy and sustainability and the promotion of longer working lives.  

This  White  Paper  presents  a  comprehensive  set  of  initiatives  to  be  taken  at  EU  level  in 
support of national pension reforms. These address the two main areas for reform recognised 
in the AGS, i.e. balancing time spent in work and retirement and developing complementary 
private retirement savings. The White Paper also focuses on ensuring that the holistic process 
initiated  by  the  Green  Paper  is  sustained  through  improving  coordination  and  monitoring 
tools. The specific actions are set out in Annex 1, for instance on portability, the IORP review 
or a range of measures to enable people to stay longer on the labour market. This White Paper 
offers  thus  an  important  foundation  upon  which  a  fruitful  cooperation  with  Member  States, 
the European Parliament and the social partners can be built. 

5. 

CONCLUSION  

Many  pension  systems  across  the  European  Union  need  some  degree  of  adjusting  to  ensure 
that they can deliver adequate pensions on a sustainable basis.  This  has  been highlighted in 
the  Commission’s  2011  AGS  and  translated  into  Country-Specific  Recommendations  on 
pensions  addressed  to  a  majority  of  Member  States.  The  need  for  comprehensive  pension 
reforms, underpinned by  labour market measures enabling women and men to work longer, 
has  again  been  emphasised  in  the  Commission’s  2012  AGS.  In  support  of  these 
recommendations,  this  White  Paper  presents  a  strategy  for  adequate,  sustainable  and  safe 
pensions over the coming decades. There can be no doubt that the challenges, notably those 
related to demographic changes and the sustainability of public finances, are very significant, 
but there are also good ways of tackling them.  

The current sovereign debt crisis makes it clear how important it is for the European Union as 
a  whole  that  every  single  Member  States  succeeds  in  addressing  current  challenges  in  their 

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pension systems. Pension reforms therefore must remain under close scrutiny in the context of 
the  Europe  2020  strategy.  We  need  a  more  European  approach  to  tackling  challenges  to 
pension  systems,  in  line  with  successive  conclusions  of  the  European  Council  which  have 
called for closer economic policy co-ordination. It is now time to act and to implement in a 
decisive  manner  the  actions  put  forward  in  this  White  Paper.  Member  States,  European 
institutions  and  all  stakeholders,  in  particular  social  partners,  need  to  respond  together  and 
within  their  respective  roles,  to  the  challenges  that  population  ageing  represents.  Pension 
systems must contribute to growth in Europe by promoting active ageing, while remaining an 
adequate and  sustainable instrument at the  core of the European social model to sustain the 
living standards of elderly Europeans.  

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ANNEX 1: 
EU initiatives in support of Member State efforts 

1. 

BALANCING TIME SPENT IN WORK AND RETIREMENT 

Achieving  a  better  balance  between  times  spent  in  work  and  in  retirement  requires 
adjustments to pension systems, raising retirement ages and strengthening incentives to work 
longer. The extent to which these measures translate into higher effective retirement ages and 
increased  labour  force  participation  of  older  workers  depends,  however,  on  measures  that 
enable older workers to stay on the labour market. 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

In the framework of the Europe 2020 strategy, the Commission will closely monitor 
and  encourage  pension  and  labour  market  reforms  in  line  with  the  Annual 
Growth  Surveys  and  the  Country  Specific  Recommendations  with  the  aim  of 
bringing  about  later  pension  take-up  including,  by  the  timely  equalisation  of 
pensionable  ages  for  women  and  men  where  this  has  not  already  been  done  and 
linking retirement ages to increases in life expectancy. 

The  Commission  will  support  the  EMCO,  EPC  and  SPC  in  their  multilateral 
surveillance  of  pension  reforms  and  offer  financial  support  to  Member  States 
through  the  PROGRESS  programme  and  the  future  Programme  for  Social  Change 
and Innovation to facilitate mutual learning and policy development. 

The  Commission  will  ask  the  relevant  committees  (e.g.  SPC,  Advisory  Committee 
on equal opportunities between women and men) to identify and recommend best 
practice  in  reducing  the  gender  gap  in  pensions  (e.g.  promotion  of  equal  pay, 
minimum pension entitlements, care credits, pension rights splitting at divorce). 

During  the  European  Year  2012  on  Active  Ageing  and  Solidarity  between 
Generations the Commission will raise awareness of the benefits and possibilities of 
working longer and stimulate the dissemination of good practices of age management 
in work places and labour markets. 

In  the  framework  of  Europe  2020,  the  Commission  will  step  up  its  support  for 
policy coordination and joint work on enabling and encouraging older workers, 
women  in  particular,  to  stay  longer  on  the  labour  market.  This  will  include 
promoting  joint  work  by  the  SPC  and  EMCO  on  gender  specific  obstacles  to,  and 
opportunities  for,  extended  working  lives,  the  development  of  end-of-career  labour 
markets  across  the  Member  States  and  projects  under  the  European  Innovation 
Partnership on active and healthy ageing. 

In  the  framework  of  European  Social  Dialogue,  the  Commission  will  call  on  the 
social  partners  to  develop  ways  of  adapting  work  place  and  labour  market 
practices,  including  career  management  notably  regarding  strenuous  jobs,  so  as  to 
facilitate longer working lives for women and men. The European Foundation for the 
Improvement  of  Living  and  Working  Conditions  and  the  European  Agency  for 
Safety and Health at Work will provide expert advice at EU level. 

(7) 

Building  on  its  proposal  for  the  European  Social  Fund  in  the  2014-2020 
programming period, the Commission will encourage Member States to make use of 

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the ESF for supporting active and healthy ageing, including reconciliation of work 
and  family  life,  and  will  closely  monitor  whether  ESF  programmes  effectively 
support  the  reform  needs  identified  in  this  area  in  the  Country  Specific 
Recommendations. 

(8) 

The Commission will consult the social partners on how unwarranted mandatory 
retirement ages could be revised in collective agreements and national legislation.  

2. 

DEVELOPING COMPLEMENTARY PRIVATE RETIREMENT SAVINGS  

to  supplementary  schemes  and 

their  cost-effectiveness.  Opportunities 

An enhanced role of complementary private retirement savings depends first of all on better 
for 
access 
complementary  retirement  savings  through  occupational  and  third  pillar  arrangements  are 
underdeveloped  and  lacking  in  cost-effectiveness  and  safety  in  many  Member  States.  Thus 
there  would  be  added  value  in  stepping  up  European  support  for  better  coverage  of  women 
and  men  and  the  proliferation  of  good  practices  including  in  the  optimal  targeting  of  tax 
incentives  for  prefunded  pension  schemes.  These  can  be  promoted  by  governments  or  the 
social partners. As people in the future will have to rely more on complementary retirement 
savings, the safety and performance of which will need to be optimised. Improving hard and 
soft  EU  regulation  can  contribute  significantly  to  this.  Finally,  supplementary  pension 
schemes  must  be  compatible  with  the  requirements  of  flexible  labour  markets  and  job 
mobility. 

(9) 

The Commission will, as from 2012, cooperate with Member States following a best 
practices approach to assess and optimise the efficiency and cost-effectiveness of tax 
and  other  incentives  for  private  pension  saving,  including  better  targeting  of 
incentives on individuals who would otherwise not build up adequate pensions. It will 
also  offer  financial  support  to  Member  States  and  social  partners  wishing  to  design 
cost-effective supplementary pension schemes, to help them benefit from the good 
practices and experiences of other countries.  

(10)  The  Commission  will  invite  the  SPC  to  review  good  practice  with  regard  to 
individual  pension  statements  with  the  aim  of  encouraging  Member  States  to 
provide  better  information  to  individuals  for  their  retirement  planning  and 
decisions on how much to save through supplementary pension schemes. 

(11)  The  Commission  will,  in  2012,  present  a  legislative  proposal  to  review  the  IORP 
directive. The aim of the review is to maintain a level playing field with Solvency II 
and  promote  more  cross-border  activity  in  this  field  and  to  help  improve  overall 
pension  provision  in  the  EU.  This  will  help  address  the  challenges  of  demographic 
ageing and public debt. 

(12)  The Commission will, in 2012, take initiatives to ensure a more effective protection 
of  workers’  occupational  pension  rights  in  the  event  of  insolvency  of  their 
employer  on  the  basis  of  Article  8  of  Directive  2008/94/EC,  taking  into  account  a 
horizontal assessment of its implementation across the EU and ECJ jurisprudence. 

(13)  The Commission will, by 2013, present an initiative aimed at raising the quality of 
third-pillar  retirement  products  for  women  and  men  and  improving  consumer 
information  and  protection  standards  via  voluntary  codes  and  possibly  an  EU 

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certification  scheme  for  such  products,  building,  where  appropriate,  on  measures  to 
improve  information  for  consumers  planned  for  2012  on  'packaged  retail  investment 
products' (PRIPs). 

(14)  Working  with  stakeholders  such  as  the  social  partners,  the  pension  industry  and 
advisory  bodies  such  as  the  Pension  Forum,  the  Advisory  Committee  on  equal 
opportunities between women and men, the Commission will develop a code of good 
practice  for  occupational  pension  schemes  (2nd  pillar),  addressing  issues  such  as 
better  coverage  of  employee,  the  payout  phase,  risk-sharing  and  mitigation,  cost-
effectiveness and shock absorption. 

(15) 

In 2012, the Commission will, in close cooperation with the Council and the European 
Parliament,  resume  work  on  a  pension  portability  Directive  setting  minimum 
standards for the acquisition and preservation of supplementary pension rights. While 
promoting cross-border pension mobility for all occupations, the Commission will also 
pursue the on-going work on a pan-European pension fund for researchers. 

(16)  The Commission will in 2012 assess the case for extending the scope of Regulation 
883/2004/EC  on  the  coordination  of  social  security  systems  as  regards  certain 
occupational schemes. 

(17)  The  Commission  will  promote  the  development  of  pension  tracking  services 
allowing people to keep track of their pension entitlements acquired in different jobs. 
It will consider, in the context of the revision of the IORP directive and the proposal 
for a portability directive, how the provision of the required information for pensions 
tracking can be ensured, and it will support a pilot project on cross-border tracking.  

(18)  The  Commission  will  investigate  whether  the  tax  rules  concerning  (i)  cross-border 
transfers  of  occupational  pension  capital  and  life  insurance  capital  (ii)  life  insurance 
contributions paid to providers established elsewhere in the EU and (iii) cross-border 
investment  returns  of  pension  and  life  insurance  providers,  including  their  income 
from  real  estate  and  capital  gains  present  discriminatory  tax  obstacles  to  cross-
border  mobility  and  cross-border  investments;  where  necessary,  it  will  initiate 
infringement procedures. The Commission will also discuss with Member States how 
to reduce the risk that cross-border pensions are subject to double taxation (or escape 
taxation altogether).  

(19)  The Commission will explore the need for removing contract law-related obstacles 
to  the  design  and  distribution  of  life  insurance  products  with  savings/investment 
functions  with  the  aim  of  facilitating  the  cross-border  distribution  of  certain  private 
pension products. 

3. 

ENHANCING  THE  EU'S  MONITORING  TOOLS  ON  PENSIONS  AND  STRENGTHENING 
SYNERGIES ACROSS POLICY AREAS 

In  view  of  the  increasing  interdependence  of  Member  States,  it  is  important  to  monitor,  in 
close  cooperation  with  the  SPC  and  EPC,  the  progress  Member  States  are  making  towards 
adequate,  sustainable  and  safe  pensions,  including  with  benchmarking  indicators  in  the 
context of Europe 2020. By involving a wide range of stakeholders and by strengthening the 

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role of the Pensions Forum, the holistic approach on pensions advocated by the Green Paper 
on Pensions will be developed.  

(20)  The Commission, in cooperation with the EPC will release the 2012 Ageing Report, 
assessing the economic and budgetary impact of ageing, which will form the basis for 
a thorough assessment of the sustainability of public finances envisaged for release in 
the  Commission's  2012  Sustainability  Report.  In  cooperation  with  the  Social 
Protection Committee it will also prepare in 2012 a Pension Adequacy Report which 
can help Member States, in the context of the Platform against Poverty, to assess the 
adequacy of their pensions systems for women and men. 

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ANNEX 2: 
SUMMARY OF THE GREEN PAPER CONSULTATION 

Results of the consultation and the debate triggered by the Green Paper  

The  consultation  received  almost  1 700  responses,  including  more  than  350  from  Member 
State  Governments,  National  Parliaments,  business  and  trade  union  organisations,  civil 
society  and  representatives  of  the  pension  industry.  The  EPSCO  and  the  ECOFIN  Councils 
welcomed the Green Paper. Contributions from the EP, EESC and CoR arrived in February 
2011. 

The responses from key stakeholders provide a rich texture of well presented positions on the 
European  framework  on  pensions  and  pension  issues  in  general,  which  help  to  shape  the 
various policy options for consideration.  

In  addition,  more  than  100  meetings  with  stakeholders  involving  Commissioners  Andor, 
Barnier  and  Rehn  or  their  services  have  taken  place  around  Europe.  The  consultation  has 
influenced the orientation of discussions in many Member States. Importantly, it has caused 
national deliberations to be more informed by comparative European perspectives. 

The  bulk  of  Member  States  want  efforts  to  concentrate  on  improving  or  deepening  the 
existing European policy framework on pensions rather than extending it. Yet, most of them 
at the same time welcome reinforced economic policy coordination.  

In  the  European  Parliament,  the  ECON,  IMCO  and  FEMM  committees  submitted  their 
contribution  to  EMPL  as  the  leading  committee,  and  the  final  text  adopted  by  the  EP 
adequately  reflected  different  views  and  has  found  very  broad  support.  The  report  supports 
the holistic approach the Commission took in the GP and calls for well-coordinated policies to 
tackle the intertwined issues of adequacy, sustainability and safety.  

National pension-related events such as the adoption of significant pension reforms in Greece 
and France obviously provided a lively backdrop to the reflections on the Green Paper. Events 
in  some  central  European  Member  States  also  revealed  the  importance  of  the  treatment  of 
systemic pension reforms in the Stability and Growth Pact.  

In  the  key  area  of  policy  coordination  the  consultation  has  been  overtaken  by  events 
resulting  from  the  sovereign  debt  crisis.  The  package  on  reinforced  economic  policy 
coordination and the references to specific measures to be taken to modernise pension systems 
in  the  Annual  Growth  Survey  will  entail  important  changes  to  the  European  framework  for 
pensions and further impetus can be expected from the European Council. 

Responses on pension framework and retirement age 

[Qs1-2]  Responses  to  the  Green  Paper  suggest  that  improvements  to  the  existing  EU 
pensions  framework  could  be  beneficial  in  ensuring  the  sustainability  of  public  finances. 
Some respondents consider that the EU level could contribute with harmonised measures of 
pension  indicators,  facilitating  an  informed  and  straightforward  discussion  on  relevant 
pension  policy  issues,  and  challenges  at  the  EU  level.  Many  underline  that  such  additions 
should  be  developed  within  existing  frameworks,  which  in  general  are  deemed  to  be 
appropriate.  The  social  OMC  is  seen  as  the  right  instrument  to  support  MS  efforts  to 
strengthen adequacy of pensions. 

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[Qs3-4]  A  higher  effective  retirement  age  is  seen  as  necessary.  While  according  to  some 
respondents,  it  should  be  determined  by  national  policies  with  involvement  of  the  social 
partners,  other  suggest  that  the  pensionable  age  should  evolve  in  line  with  life-expectancy 
while a few suggest to take into account the life or the healthy-life) expectancies of different 
professions. The EP recommends that priority be given to ensuring that employees work until 
the pensionable age. Numerous respondents underline that pension reforms should be coupled 
with  active  labour  market  policies,  lifelong  learning  opportunities,  effective  social  security 
and  health  care  systems,  and  improvement  of  working  conditions.  Linkages  with  many 
elements  of  the  Europe  2020  strategy  are  identified,  including  the  need  for  greater  labour 
market  participation  and  the  impact  of  pension  policy  on  poverty  rates.  The  EP  suggests 
incorporating the holistic objectives of the Green Paper into the Europe 2020 Strategy. 

[Q14]  Respondents  recognized  a  very  important  role  for  the  EU  in  policy  coordination  of 
pension  policies  by  facilitating  surveillance,  coordination  and  mutual  learning  between  the 
Member States. The existing framework of the OMC, the Pension Forum and more broadly 
the SGP and the Europe 2020 strategy was seen as largely sufficient. But a deepening of the 
existing  framework,  for  example  through  closer  cooperation  between  the  EPC  and  the  SPC 
would be important. The EP thought a European Pensions Platform involving representatives 
of  EU  institutions  along  with  all  stakeholders  would  be  helpful,  and  that,  in  order  to  avoid 
overlap, account should be taken of the existing "Pensions Forum". 

Responses to regulation-related questions 

[Q5]  Most  respondents  were  in  favour  of  reviewing  the  IORP  Directive  in  order  to  clarify 
legal uncertainties related to cross-border activity and offered suggestions for how this could 
be done. 

[Qs6-7]  There  was  universal  support  for  removing  any  obstacles  to  mobility  caused  by 
pension  rules,  but  less  agreement  on  what  this  should  mean  in  practical  action.  Most 
respondents  who  addressed  the  co-ordination  of  social  security  systems  under  Regulation 
883/2004 felt that the co-ordination worked well and that there was no need either to change 
this regulation or to expand its scope.  

Nearly  all  who  addressed  portability  of  supplementary  pensions  supported  an  EU-level 
initiative.  The  Regulation  883-type  co-ordination  approach  was  felt  to  be  unsuitable  for 
supplementary  pension  schemes  and  the  majority  were  strongly  against  the  idea  of 
considering transfers issues again. The acquisition and preservation approach pursued for the 
last  few  years  attracted  wide  support  including  from  the  EP,  though  others  remained  firmly 
opposed. The notion of a tracking service was widely welcomed, though with an emphasis on 
national level services, at least at first. 

[Q8]  Regarding  funded  pension  schemes  and  products,  employees,  pensioners  and 
insurance companies saw a need to review EU legislation to ensure consistency in regulation 
and supervision. Employers and pension funds were less open to further EU initiatives.  

[Q9]  Concerning  ways  to  ensure  balance  between  risk,  security  and  affordability,  there 
was  a  feeling  that  the  EU  should  avoid  binding  regulation  and  should  rather  encourage 
relevant national regulation or a non-binding EU code (recommendation). 

[Q10] The issue of a solvency regime for pension funds was mostly addressed by employers 
associations,  pension  funds  and  service  providers,  with  little  input  from  members  and 

EN 

21 

   EN 

 
beneficiaries.  Most  respondents  were  supportive  of  risk-based  supervision,  suggesting  that 
substance should be favoured over form. The right approach needs to focus on the nature and 
duration  of  pension  liabilities,  taking  account  of  the  additional  risk-mitigating  security 
mechanisms  available  to  pension  funds.  The  EP  considers  that  (i)  financial  markets  can 
function efficiently only when there is confidence and trust wherefore solid prudential rules 
for financial institutions, including IORPs, are required and that (ii) the qualitative elements 
of Solvency II form a valuable starting point for enhancing the supervision of IORPs. 

[Q11]  Respondents  agree  on  the  need  for  protection  against  insolvency  of  sponsoring 
employers, but only the EP and a minority want further EU legislation, as this, according to 
the majority, is best secured at national level. The implementation of existing EU legislation 
and effectiveness of national measures should be analyzed before envisaging changes to the 
EU legislative framework. 

[Q12]  On  modernization  of  minimum  disclosure  requirements  for  pension  products, 
respondents including the EP stressed the need for clear and comparable information and most 
considered that there is a potential for EU value added. 

[Q13]  Though  recognising  the  importance  of  good  default  options  about  participation  and 
investment in pension design, few respondents saw the need or even the technical possibility 
for developing a common approach at EU level. 

EN 

22 

   EN 

 
ANNEX 3  
RETIREMENT, SUPPLEMENTARY PENSIONS, COUNTRY SPECIFIC RECOMMENDATIONS AND LATEST REFORMS IN EU MEMBER STATES 

Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Mem-
ber 
State 

AT 

17.9/ 
21.4 

62.6/ 
59.4 ## 

65/60 

65/60 

65/65 

4.9 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

CSR  3-  In  consultation  with  the  social  partners 
and according to national practices, take steps to 
further limit access to the current early retirement 
scheme  for  people  with  long  insurance  periods 
and  take  steps  to  reduce  the  transition  period  for 
harmonisation  of  the  statutory  retirement  age 
the 
between  men  and  women 
sustainability  and  adequacy  of 
the  pension 
system. Apply strictly the conditions for access to 
the invalidity pension scheme. 

to  ensure 

Two areas of reform set out in 2010: First, as of 2014 stricter 
rules will apply for early retirement on the basis of long-term 
insurance  records  ('Hacklerregelung')  by 
the 
qualifying  age  by  2  years,  i.e.  from  currently  60  to  62  years 
for  men,  and  from  currently  55  to  57  years  for  women,  and 
only  counting  active  employment  as  contributory 
time. 
Second,  as  from  2011  invalidity  pensions  have  become 
conditional  on  participation  in  a  rehabilitation  measure.  In 
addition,  a  centralised  system  for  assessing  applications  for 
this type of pension has been introduced.  

increasing 

A  working  group  has  been  established  to  develop  further 
reforms  on  basis  of  a  proposal  presented  by  the  social 
partners in October 2011. 

EN 

23 

EN 

 
  
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Mem-
ber 
State 

BE 

17.5/ 
21.1** 

61.2/ 
61.9 ## 

65/65 

65/65 

- 

3.3 (v) 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

CSR  2-  Take  steps  to  improve  the  long-term 
sustainability  of  public  finances.  In  line  with  the 
framework  of  the  three-pronged  EU  strategy,  the 
focus  should  be  put  on  curbing  age-related 
expenditure, notably by preventing early exit from 
the  labour  market  in  order  to  markedly  increase 
the  effective  retirement  age.  Measures  such  as 
linking 
life 
the  statutory 
expectancy could be considered. 

retirement  age 

to 

As  of  1  January  2012,  new  rules  relating  to  age  and  career 
for  the  early  statutory  pension  have  been  introduced.  The 
age will be gradually increased from 60 to 62 by 2016 (2012: 
60  years;  2013:  60.5  years;  2014:  61  years;  2015:  61.5 
years; 2016: 62 years). The number of required career years 
will also be gradually increased from 35 to 40 years by 2015 
(2012:  35  years;  2013:  38  years;  2014:  39  years;  2015:  40 
years).  In  the  public  sector,  the  number  of  required  career 
years will be increased from 5 to 40 years by 2015 (2012: 5 
years;  2013:  38  years;  2014:  39  years;  2015:  40  years). 
Transition  measures  are  currently  being  discussed.  The 
implementing Royal Decree is expected by April 2012.  

for  women 

to  40  years 

The  conditions  as  to  age  and  career  for  early  conventional 
retirement 
(pre-retirement/bridge  pension)  will  also  be 
increased  as  of  1  January  2012.  In  general,  the  age  will  be 
increased  from  58  to  60  years  and  the  number  of  required 
career years will raise from 38 to 40 years for men and from 
35 
for  collective  bargaining 
agreements  concluded  after  31/12/2011.  Older  collective 
bargaining  agreements  will  be  gradually  brought  in  line  with 
these new requirements between 2012 and 2024. In the case 
of 
undergoing 
restructuring or experiencing difficulties, the minimum age is 
set  to  increase  from  52  to  55  between  2012  and  2018.  The 
system  of  part-time  preretirement  will  be  abolished  as  of 
1/01/2012.  

companies 

dismissals 

collective 

in 

EN 

24 

EN 

 
  
 
 
Mem-
ber 
State 

BG 

CY 

Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

13.6/ 17 

64.1/ 
64.1 # 

63/60 

63/60 

65/63 

n/a 

the  current  pension 

CSR  3-  Implement  the  agreed  steps  with  social 
partners  under 
reform, 
advance  some  of  its  key  measures  that  would 
help  to  increase  the  effective  retirement  age  and 
reduce  early  exit,  such  as  through  the  gradual 
increase of the social insurance length of service, 
and  strengthen  policies  to  help  older  workers  to 
stay longer in employment. 

Initially, the 2011 reform foresaw an increase in pension age 
from  63/60  (M/W)  to  65/63  between  2021  and  2026,  while, 
for people without full careers, to age 67 (both genders after 
2024).  Contributory  periods  are  also  lengthened  for  several 
categories  of  employees,  contribution  rates  raised  in  2011 
and 2017, and accrual rates in 2017. 

the  draft  2012  budget, 

In mid-November 2011 the Government proposed, within the 
to 
parliamentary  debate  on 
considerably  advance  some  of  the  key  components  of  the 
pension reform previously foreseen for 2021. To this end, the 
Parliament  adopted  in  the  beginning  of  December  2012 
legislative  changes  envisaging  a  gradual  increase  of  the 
pension age for both genders by 4 months per year - as of 1 
January  2012  until  reaching  a  pension  age  of  65  years  for 
men and 63 years for women. 

18.1/ 
20.9** 

62.8 

65/65 

65/65 

- 

n/a 

CSR  3  -  Improve  the  long-term  sustainability  of 
public finances by implementing reform measures 
to  control  pension  and  healthcare  expenditure  in 
order to curb the projected increase in age-related 
expenditure.  For  pensions,  extend  years  of 
contribution, 
life 
expectancy  or  adopt  other  measures  with  an 
equivalent  budgetary  effect,  while  taking  care  to 
address  the  high  at-  risk-of-poverty  rate  for  the 
elderly.  For  healthcare,  take  further  steps  to 
accelerate  implementation  of  the  national  health 
insurance system. 

retirement  age  with 

link 

introduced, 

(4)  access 

According  to  the  2009  reform  of  the  Social  Insurance  Fund 
(1) contribution rates will increase by 1.3 p.p. between 2009 
and 2039 in 5-year intervals, (2) contribution periods for old-
age  pension  eligibility  were  increased  with  the  minimum 
contributory  period  increasing  from  3  to  10  years,  (3)  a  6-
year  ceiling  on  education/training  credits  granted  in  the 
contributory  system  was 
to 
unemployment  benefits  for  beneficiaries  of  occupational 
pensions has been restricted, (5) periodic actuarial review of 
pension  system  will  be  carried  out.  A  package  of 
consolidation  measures  was  announced  in  August  2011, 
among  which  (1)  a  permanent  contribution  of  3%  on  gross 
earnings  of  public  and  wider  public  sector  employees  for 
public  pensions  -  as  of  01/10/2011,  (2)  the  inclusion  of 
newcomers  to  the  civil  service  only  in  the  Social  Insurance 
Fund  (not  in  the  occupational  pensions  scheme)  -  as  of 
01/10/2011, (3) an increase in the rate of contribution to the 
Widows  and  Orphans  Fund  by  1.25  p.p.  to  2%  on  gross 
earnings – as of 01/10/2011. 

EN 

25 

EN 

 
  
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Mem-
ber 
State 

CZ 

15.5/ 19 

61.5/ 
59.6 

62/60 

63y10m/
63y8m 

65/65 

4.6 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

CSR 2- Implement the planned pension reform in 
order  to  improve  the  long-term  sustainability  of 
public finances and to ensure the future adequacy 
of  pensions.  Additional  efforts  should  focus  on 
further  changes  to  the  public  pillar  to  ensure  that 
the system is not a source of fiscal imbalances in 
the  future,  and  on  the  development  of  private 
savings.  With  a  view  to  raising  the  effective 
retirement age, measures such as a link between 
the  statutory  retirement  age  and  life  expectancy 
could  be  considered.  Ensure  that  the  envisaged 
funded scheme attracts broad participation, and is 
designed to keep administrative costs transparent 
and low. 

2011  Pension  Reform:  Public  Pillar,  effective  as  of  30  Sept 
includes:  

- increases in the retirement age which  will continue to rise, 
in particular for women with children, with a view to unifying 
the  retirement  age  for  all  contributors  after  2040.  After 
reaching  a  common  retirement  age,  it  will  keep  rising  by 
further two months per year of birth until further amendment;- 
greater link between pensions and contributions in the public 
pillar; 

-  stricter  indexation  rule:  the  former  rule  specified  a  lower 
limit for increases in pensions, now the limit is binding; 

-  extension  of  the  assessment  period  for  the  calculation  of 
pensions;  

- tightening of early retirement options. 

2013  Pension  Reform:  Private  Pillar  has  been  approved.  It 
will enter into force in 2013.. It envisages workers will be able 
to  transfer  3 pps  of  their  mandatory  pension  insurance 
payments  to  private  funds  as  of  2013,  on  the  condition  that 
they  will  add  a  further  2 pps  of  contributions  from  their 
income.  The  transfer  will  be  facultative  for  people  not  older 
than  35  years.  People  above  35  will  be  able  to  join  only  by 
the end of the first half of 2013.  

Furthermore, according to the 2010 reform, study periods are 
no longer credited and the required insurance period will be 
increased from 25 to 35 years in 2019.  

EN 

26 

EN 

 
  
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

17.8/ 
20.9 

62.6/ 
61.9 

65/65 

65y9m/6
5y9m 

67/67 

5.2 (x) 

17/ 19.7 

63.2/ 
61.4 

65/65 

(66/66) 

67+/67+ 

43.3 (w) 

Mem-
ber 
State 

DE 

DK 

EE 

14.2/ 
19.4 

62.6 

63/61 

64/64 

65/65 

6.9 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

CSR  2-  In  order  to  strengthen  employment  and 
the  sustainability  of  public  finances,  take  further 
steps  to  increase  long-term  labour  supply,  by 
implementing  the  recently  concluded  reform  on 
the  voluntary  early  retirement  pension  (VERP) 
scheme,  reforming  the  disability  pension  and 
better  targeting  subsidised  employment  schemes 
(the 
the  most 
vulnerable groups. 

"flex-job"  system) 

towards 

An increase in pensionable age from 65 to 67 between 2012 
and  2029  was  legislated  in  2007.  However,  the  pension 
reform  will  lead  to  a  reduction  of  the  benefit  level,  which  is 
supposed to be compensated for by capital-funded pensions. 
In order to prevent growing old age poverty, the Minister for 
Labour  and  Social  Affairs  has  announced  a  new  pension 
supplement 
is  now  under 
discussion.  In  addition,  an  extension  of  coverage  in  social 
pension  insurance  for  self-employed  people  who  are  not 
members of a mandatory pension scheme is discussed. 

("Zuschussrente")  which 

The  2006  reform  increased  the  pensionable  age  from  65  to 
67 (between 2024 and 2027) and linked it to life expectancy 
afterwards.  According  to  a  reform  agreed  in  May  2011,  the 
increase will take effect five years earlier than foreseen in the 
2006  package  (the  pensionable  age  will  increase  gradually 
by half a year between 2019-2022). The CSR recommended 
reform on early retirement was legislated in Autumn 2011. 

The  main  policy  measures  implemented  during  2009-2011 
were  ad  hoc  changes  in  the  indexation  rule  of  pensions  in 
2009  which  smoothed  the  value  of  nominal  pensions  and  a 
temporary suspension of the transfers to the funded pension 
system  in  the  second  half  of  2009  and  in  2010.  These 
transfers were partially resumed in 2011 and fully from 2012 
with  a  compensation  mechanism  implemented  during  2014-
2017.  The  pension  age  will  be  raised  to  65  during  2017-
2026.  In  the  compulsory  funded  pension  scheme  the  crisis 
has  resulted  in  stricter  control  and  clearer  rules  over  the 
management of the funds and more flexibility for employees 
and employers. 

EN 

27 

EN 

 
  
 
 
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Mem-
ber 
State 

EL 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

18.5/ 
20.4 

61.3/ 
61.6 

65/60 

65/65 

Retirement 
age linked 
to life 
expectancy 
(69 years 4 
months for 
both M/F in 
2060) 

0.0 

The  supplementary  pension  funds  will  be  revised 
to  eliminate  imbalances,  introduce  a  stricter  link 
between  benefits  and  contributions,  to  guarantee 
the  sustainability  of  all  funds,  and  reduce  their 
number.  Disability  pensions  and 
lump  sum 
pensions  for  civil  servants  and  public  enterprise 
employees will be revised. 

to 

the 

strengthen 

to  all  current  and 

Memorandum of Understanding. According to the 
MoU:  The  existing  pension  funds  will  be  merged 
in  three  funds.  The  reform  will  introduce  a  new 
link  between 
system 
contributions and benefits, with uniform rules that 
will  apply  pro-rata 
future 
workers. The normal retirement age will be set to 
65  years,  increasing  in  line  with  life  expectancy. 
Benefits will be indexed to prices. The reform will 
also  restrict  early  retirement,  including  for  those 
insured before 1993, and reduce the list of heavy 
and  arduous  professions.  The  new  system  will 
also include a means-tested social pension for all 
citizens  above  the  normal  retirement  age  so  that 
an  important  safety  net  is  provided,  consistent 
with fiscal sustainability. 

The  introduction  of  a  new  basic  pension  of  EUR 

In  July  2010,  the  Parliament  adopted  a  comprehensive 
pension reform of the main pension schemes in line with the 
Memorandum  of  understanding.  The  reform  simplified  the 
highly  fragmented  pension  system,  enhanced  transparency 
and  fairness,  postponed  the  retirement  age,  and  decreased 
the generosity of benefits. The new universally binding rules 
on  entitlements,  contributions,  accumulation  rules  and 
indexation  of  pension  rights  applies  to  the  main  pension 
funds  (IKA,  OGA,  OAEE,  public  sector  scheme,  Bank  of 
Greece  scheme).  The  pension  reform  is  applied  pro-rata  to 
all current and future workers.  
The main elements of the reform are: 
(i) 
360/month (12 yearly payments).  
The  new  system  introduces  accrual  rates  with  the 
(ii) 
same profile for all workers that depend only on the length of 
the career (ranging from 0.8 to 1.5 percent of earnings).  
(iii) 
The  reform  increases  the  statutory  retirement  age 
from 60 to 65. The minimum age for retirement is set to 60; 
penalties apply for persons with less than the full contributory 
career. 
(iv) 
years (compared with generally 35 years previously). 
(v) 
the  minimum  and  statutory 
retirement  ages  will  be  adjusted  in  line  with  changes  in  life 
expectancy every three years. 
(vi) 
in both the private and public sector by 2013. 
(vii) 
not exceed HICP inflation. 
(viii) 
the full-earnings history.  

Pensionable  earnings  will  be  calculated  based  on 

The  full  contributory  career  is  increased  to  40 

Indexation of benefits (including basic pension) will 

Equalisation of retirement ages of men and women 

from  2021, 

As 

EN 

28 

EN 

The  new  legislation  includes  a  sustainability  clause  (article 
11.b.1,  of  Law  3863,  15  July  2010)  which  stipulates  that,  if 
long-term  projections  (to  be  run  by  the  NAA  every  2  years) 
show  the  rise  in  public  pension  expenditure  between  2009 
and  2060  to  exceed  2.5  percentage  points  of  GDP,  then 
relevant  parameters  of  the  pension  system  will  be  changed 
to  bring  the  increase  of  expenditure  below  the  targeted 
threshold. 

 
  
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Mem-
ber 
State 

ES 

18.5/ 
22.7 

61.2/ 
63.4 

65/65 

65/65 
(66y4m/6
6y4m) 

67/67 

8.1 

17.5/ 
21.5 

62.3/ 
61.1 

65/65, 
63-68 

65/65, 
63-68 

- 

76.8 

FI 

EN 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

The  2010/2011  pension  reform  increased  the  pensionable 
age from 65 to 67 (implemented gradually between 2013 and 
2027), increased the length of contribution period entitling to 
a  full  pension  benefit  from  35  to  37  years,  early  retirement 
age normally increased to 63 from 61 (but with the possibility 
to  retire  at  61  retained  during  the  economic  crisis  for  those 
with at least 33 years of contributions) increased penalties for 
early  retirement,  extended  the  period  of  contributions  taken 
into  calculation  of  base  pension  from  15  to  25  in  2022, 
introduced  a  sustainability  factor  from  2027  with  cyclical 
revisions  every  5  years,  introduced  longer  periods  for 
childcare  crediting,  and  simplified  the  system  (schemes  for 
agricultural  and  domestic  workers  were  integrated  into 
general scheme). 

On  28  October  2011,  the Government  approved  the  Global 
Employment  Strategy  for  Older  Workers  2012-2014  (in 
Spanish,  "55  y  más"  Strategy).  This  initiative  constitutes a 
fundamental  complement  to  the  reform  of  the  pension 
system  passed  in  September  this  year.  The  "55  y  más" 
strategy  establishes  four  objectives:  (i)  to  increase  the 
employment  rate  and  reduce  unemployment  among  this 
group; (ii) to assist in the maintaining of jobs; (iii) to improve 
working  conditions  and  (iv)  to  foster  their  reincorporation  in 
the job market. 

linked  pension  benefits 

Finland 
life  expectancy 
coefficient  in  2009.  The  Government  and  labour  market 
organisations agreed in 2009 to raise the effective retirement 
age to at least 62.4 years by 2025. 

to  a 

CSR  2-  Adopt  the  proposed  pension  reform  to 
extend  the  statutory  retirement  age  and  increase 
the number of working years for the calculation of 
pensions  as  planned;  regularly  review  pension 
parameters 
life 
expectancy,  as  planned,  and  develop  further 
measures  to  improve  lifelong  learning  for  older 
workers. 

line  with  changes 

to 

in 

to 

improve 

the 
CSR  4-  Take  measures 
employability  of  older  workers  and 
their 
participation  in  lifelong  learning.  Take  further 
steps,  in  consultation  with  social  partners  and  in 
accordance  with  national  practices,  to  encourage 
older  workers  to  stay  in  the  labour  market,  by 
measures  to  reduce  early  exit  and  increase  the 
effective  retirement  age.  In  view  of  the  already 
existing  system  of  linking  pension  benefits  to  life 
expectancy, consider a link between the statutory 
retirement age and life expectancy. 

29 

EN 

 
  
 
 
Mem-
ber 
State 

FR 

HU 

Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

18.7/ 
23.2** 

60.3/ 
59.8 

60-
65/60-65 

62-
67/62-67 

- 

0.8 (v) 

CSR 1- Ensure the recommended average annual 
fiscal  effort  of  more  than  1  %  of  GDP  over  the 
period 2010-2013 and implement the correction of 
the  excessive  deficit  by  2013,  in  line  with  the 
Council  recommendations  under  the  EDP,  thus 
bringing the high public debt ratio on a downward 
the 
path,  and  ensure  adequate  progress 
the 
medium-term  objective 
for  2012 
necessary  corresponding  measures 
onwards, take additional measures if needed and 
use any windfall revenues to accelerate the deficit 
and debt reduction as planned; continue to review 
the  sustainability  of  the  pension  system  and  take 
additional measures if needed. 

to 
thereafter;  specify 

A  reform  of  statutory  pension  schemes  was  passed  in  the 
French  Parliament  in  November  2010.  The  most  publicised 
outcome of the reform is the gradual increase of the statutory 
retirement  age  from  60  to  62  years  by  2018  (latest  plan:  by 
2017, though not yet legislated). The reform includes a series 
of  other  measures  such  as  a  gradual  harmonisation  of 
contribution  rates  between  the  public-  and  private-sector 
schemes  or  the  creation  of  a  right  to  early  retirement  (from 
age  60)  for  workers  with  a  partial  incapacity  to  work.  Some 
technical changes have also been introduced to promote the 
development of funded pension schemes. 

14.1/ 
18.2 

60.1/ 
58.7 

62/62 

64/64 

65/65 

13.1 

The  2009  reform  (1)  increased  the  statutory  retirement  age 
from  62  to  65  between  2014  and  2022,  (2)  introduced  less 
generous  indexation  of  pensions  dependent  on  real  GDP 
growth,  as  of  2010,  and  (3)  abolished  the  13th  month 
pension  and  introduced  so-called  pension  premium.  In 
consequence  of  these  reforms  future  sustainability  will  be 
improved  and  gross  social  security  pension  expenditure  will 
reach  10.5%  of  GDP  in  2060  instead  of  13.8%  projected  in 
the Ageing Report 2009. 

In  2010  and  2011  the  government  took  drastic  steps  by 
abolishing  the  mandatory  private  pension  pillar.  At  least 
insofar  as  the  windfall  revenue  from  pension  funds  was 
diverted  to  cover  current  expenses,  this  may  somewhat 
compromise  sustainability  in  the  future.  In  December  2011 
early  retirement  was  abolished,  and  entitlements  for  current 
beneficiaries were made liable to tax. This impacts especially 
on  those  professions  where  the  work  was  considered 
arduous and which therefore benefited from early retirement 
opportunities. 

EN 

30 

EN 

 
  
 
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Mem-
ber 
State 

IE 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

Memorandum of Understanding 

According to the MoU  

In  March  2010  the  Irish  government  published  the  National 
Pensions  Framework  which  sets  out  the  Government's 
intentions for reform of the pension system in Ireland.  

18.1/ 
21.1 

63.5/ 
64.7 # 

65/65 

66/66 

68/68 

44.1 

Since then a number of changes have been made, including: 

Legislation  passed  to  raise  State  Pension  retirement  age  to 
66 in 2014, 67 in 2021 and 68 in 2028.  

Tax-free pension lump sums have been capped at €200,000  

From 2011, Social Insurance and Universal Social Charge no 
longer attract relief on pension contributions 

New  pension  arrangements  for  new  public  servants  mean 
final pension will be based on career average earnings rather 
than final salary.  

A  series  of  measures  to  ease  funding  pressures  on  DB 
schemes, such as changing priority of payment in event of a 
wind-up,  establishment  of  a  Pensions  Insolvency  Payment 
Scheme, and changes to the funding standard.  

For Q1 2011: A reduction in pension tax relief and 
pension  related  deductions  to  yield  €155m  in 
2011  

A reduction of existing public service pensions on 
progressive  basis  averaging  over  4%  will  be 
introduced  

For Q2 2011: To enhance long term sustainability 
the  authorities  undertake  to  introduce  legislation 
to  increase  the  state  pension  age  to  66  years  in 
2014, 67 in 2021 and 68 in 2028.  

For  Q3  2011:  To  put  the  public  service  pension 
system  on  a  more  sustainable  basis,  pension 
entitlement  for  new  entrants  to  the  public  service 
will  be  reformed.  This  will  include  a  review  of 
accelerated  retirement  for  certain  categories  and 
an  indexation  of  pensions  to  consumer  prices. 
Pensions  will  be  based  on  career  average 
earnings.  New  entrant's  retirement  age  will  be 
linked to the state pension retirement age.  

Q4  2011:  and  2012  also  mention  reduction  in 
pension  reliefs  and  adjustment  in  public  service 
pensions  entitlements  as  part  of  budgetary 
consolidation measures. 

EN 

31 

EN 

 
  
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Mem-
ber 
State 

IT 

18.2/ 22* 

60.8/ 
59.4 

65/60 

66y 11 
months/ 

66 11 
months 

Retirement 
age linked 
to life 
expectancy 
(70y 
3months for 
M/F in 
2060) 

4.1 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

in 

During  2011,  three  successive  legislative  interventions  (D. 
Law  111/201,  E.  Law  148/2011  and  Law  214/2011)  have 
modified the Italian pension framework. The main measures 
brought  about  these  last  reforms  may  be  summarised  as 
follows: (i) The Notional Defined Contribution (NDC) method 
is  applied  also  to  workers  under  the  Defined  Benefit  (DB) 
regime,  previously  fully  exempt.  The  extension  concerns 
contributions  accrued  as  of  1st  January  2012,  according  to 
the  pro-rata  rule;  (ii)  The  statutory  retirement  age  (SRA)  of 
women  in  the  private  sector  will  be  equalised  to  the  one  of 
men  (and  women  in  the  public  sector).  The  equalization 
process will be fully phased in by 2018; (iii) The ‘exit window’ 
mechanism  has  been  abolished  and 
replaced  by  a 
corresponding 
the  minimum  age  and/or 
increase 
contribution requirements; (iv) The contribution rates paid by 
the  self-employed  have  been  gradually  increased  from  20% 
in  2011  to  24%  in  2018.  The  contribution  rate  of  atypical 
workers has been increased by 1pp bringing it up to 27% as 
of 2012; (v) For the two-year period 2012-2013, pensions of 
an amount above 3 times the minimum pension (about 1,400 
euro per month) are not indexed to price inflation; (vi) Even if 
indexed 
the  minimum 
requirement to be entitled to the old age allowance has been 
increased  by  1  year  as  of  2018,  and  then  fully  aligned  to 
SRA; (vii) Early retirement channel based on a joint age and 
contribution  (35  years)  requirements  has  been  abolished,  in 
all  regimes.  Under  the  NDC  regime,  early  retirement  is 
allowed, up to three years before the SRA, with 20 years of 
contributions and an amount of pension of at last 1,200 euro 
per  month  in  2012,  indexed  with  the  five-year  average  of 
nominal GDP; (viii) The minimum contribution requirement to 
be  entitled  to  an  early  pension  regardless  of  age  has  been 
indexed  to  changes  in  life  expectancy  as  of  2013,  as 
foreseen for SRA; 

life  expectancy, 

to  changes 

in 

EN 

32 

EN 

 
  
 
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

13.5/ 
18.4 

59.9# 

62y6m/6
0 

64/63 

65/65 

n/a 

Mem-
ber 
State 

LT 

LU 

17.3/ 
21.6 

58.1/ 57 
∆ 

65/65 

65/65 

- 

2.2 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

the  proposed 

CSR  2-  Adopt 
implementing 
legislation on Pension System Reform. In order to 
enhance  participation 
labour  market, 
in 
remove fiscal disincentives to work, especially for 
people at pensionable age. 

the 

increase 

CSR  2-  Propose  and  implement a  broad  pension 
reform  to  ensure  the  long-term  sustainability  of 
the  pension  system,  starting  with  measures  that 
the  participation  rate  of  older 
will 
workers, 
in  particular  by  discouraging  early 
retirement.  With  a  view  to  raising  the  effective 
retirement age, measures such as a link between 
the  statutory  retirement  age  and  life  expectancy 
could be considered. 

The 2011 reform increases the retirement age to 65 for both 
men  and  women  by  2026.  Social  insurance  contributions  to 
the  mandatory  funded  pension  scheme  have  been  reduced 
from 5.5% to 2% with the possibility of increasing them again 
after the crisis upon the decision of the Government. 

reform.  Preparatory  discussions  between 

The National Reform Program sketches the main features of 
a  draft 
the 
government  and  social  partners  are  ongoing.  The  right  to 
increased  pension  benefits  will  be  more 
restricted. 
Beneficiaries  must  have  reached  the  age  of  60  (instead  of 
55) and be able to justify 40 years (instead of 38) of pension 
contributions.  Under  the  Euro  plus  pact,  the  government 
committed to finalising the reform by the end of 2011, but this 
deadline  will  probably  not  be  met.  A  working  group  on 
pension  has  been  set  up  and  is  working  confidentially;  the 
objective is also to create an activation plan for older workers 
including recommendations with examples of good practices.  

EN 

33 

EN 

 
  
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Mem-
ber 
State 

LV 

13.3/ 
18.2 

62.7 Δ Δ  

62/62 

(64.5/64.
5) 

(65/65) 

n/a 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

Memorandum of Understanding. 

to 

to  prepare 
the  MoU:  LV  was 
According 
changes  in  the  pension  system  in  order  to 
preserve future sustainability and adequacy of the 
three pillars of the pension system. In this context, 
all  special  pension  regimes  and  retirement  ages 
were to be reviewed. 

international 

organizations 

The  Second  Supplement  of  Memorandum  states 
"By  end-June  2010,  with  technical  assistance 
from 
in 
cooperation with social partners, prepare changes 
in the pension system to be implemented in 2011 
in  order  to  preserve  future  sustainability  and 
adequacy  of  the  three  pillars  of  the  pension 
system. 
this  context,  all  special  pension 
regimes and retirement ages will be reviewed" 

and 

In 

system  by  end-June  2010, 

The  Third  Supplement  of  Memorandum  states: 
"After  preparing  proposals  for  changes  in  the 
pensions 
in 
consultation  with  the  EC  and  the  IMF,  submit  to 
the  Parliament  by  end-November  2010  concrete 
proposals  to  be  implemented  in  2011  in  order  to 
preserve future sustainability and adequacy of the 
three pillars of the pension system."  

Since  July  2008,  the  Latvian  authorities  (1)  have  frozen 
indexation  in  2009  until  31  December  2013  (2)  reduced 
contribution rates to the mandatory funded pension scheme. 
Contribution  rates  to  the  funded  pillar  are  being  reduced:  in 
2009 from 8% to 2%; in 2010 from 9% to 2%; in  2011 from 
10% to 2%; in 2013 and subsequent years from 10% to 6%. 

The  government  has  approved  and  submitted 
the 
Parliament  changes  to  pension  age  (still  to  be  legislated). 
The  changes  foresee  that  the  pension  age  will  increase 
starting  from  2016  by  6  months  per  year  till  it  reaches  65 
years  in  2021.  Therefore,  proposed  but  not  legislated 
retirement  age  in  2020  will  be  64.5  years  (both  men  and 
women). 

to 

fulfilling 

the  conditions  of 

the  Second  and  Third 
By 
Supplemental  Memorandum  of  Understanding,  Latvia  has 
prepared changes in the pension system in order to preserve 
future  sustainability  and  adequacy  of  the  three  pillars  of  the 
pension  system.  Concrete  proposals  for  changes  in  the 
pension system were submitted to Parliament. 

EN 

34 

EN 

 
  
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Mem-
ber 
State 

MT 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

CSR 2- Take action to ensure the sustainability of 
the  pension  system  such  as  by  accelerating  the 
progressive increase in the retirement age and by 
linking it to life expectancy. Accompany the higher 
statutory  retirement  age  with  a  comprehensive 
active  ageing  strategy,  discourage  the  use  of 
early  retirement  schemes  and  encourage  private 
pension savings. 

The 2006 reform led to an increase in pensionable age to 65 
for both genders by 2026 and lengthening of the contribution 
period. It also changed the calculation of pensionable income 
from the best three years out of the last 10 years to the best 
ten  years  from  the  last  40  years.  In  addition,  a  Guaranteed 
National Minimum Pension payable at a rate of not less than 
60% of the Median Income was introduced for persons born 
after 1 January 1962.  

18.4/ 
21.1 

60.3 

61/60 

63/63 

65/65 

n/a 

17.7/ 21 

63.9/ 
63.1 

65/65 

65/65 
(66/66) 

65/65 

(67/67) 

129.8 

CSR  2-  Take  measures  to  increase  the  statutory 
retirement age by linking it to life expectancy, and 
underpin these measures with others to raise the 
effective  retirement  age  and  to  improve  the  long-
term  sustainability  of  public  finances.  Prepare  a 
blueprint  for  reforming  long-term  care  in  view  of 
an ageing population. 

Following  the  2006  reform,  the  Maximum  Pensionable 
Income  for  persons  born  after  1  January  1962  will  follow  a 
more  dynamic  path  with  an  indexation  of  70%  to  Wage 
Growth and 30% to Inflation. In 2007, the medical review for 
invalidity  pensions  was  made  more  rigorous  and  following 
the  2008  Budget,  pensioners  were  allowed  to  keep  on 
working  without  any  reduction  in  the  pension,  whilst  paying 
social security contributions. 

A Pension Working Group established to reveiw the reforms 
reported  to  Parliament  initially  in  Decemeber  2010.  It  has 
made  45  recommendations  including  introducing  an  explicit 
link  between  pension  age  and  life  expectancy,  assessing 
further the introduction of a notional defined contribution first 
pillar  pension  by  2013,  the  introduction  of  a  second  pillar 
pension subject to political consensus and the participation of 
social partners, as well as the introduction of a third Pension 
framework. 

to  66 

retirement  age 

In October 2010, the new government agreed to increase the 
in  2020.  Following 
statutory 
comprehensive  negotiations,  social  partners  and 
the 
government  reached  an  agreement  in  September  2011, 
implying  a  further  raise  of  the  retirement  age  to  67  in  2025 
and  linking  it  to  life  expectancy.  The  agreement  is  currently 
being enshrined in law.  

35 

EN 

NL 

EN 

 
  
 
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

61.4/ 
57.5 ## 

65/60 

15.1/ 
19.5 

65/60 

(67/??) 

(67/67) 

13.5 

Mem-
ber 
State 

PL 

PT 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

CSR 3- Raise as planned the statutory retirement 
age  for  uniformed  services,  continue  steps  to 
increase  the  effective  retirement  age,  such  as 
linking  it  to  life  expectancy.  Establish  a  timetable 
to 
farmers' 
the 
contributions to the social security fund (KRUS) to 
better reflect individual incomes. 

improve 

further 

rules 

for 

The  PT  Memorandum  of  Understanding  (MoU) 
does  not  contain  any  precise  conditionality  on 
reforming  the  whole  pensions  system  (given  the 
major  reform  done  in  2007).  However  the  MoU 
contains 
the 
specific 
expenditure side of fiscal policy: 

conditionalities 

on 

Bridging pensions have been implemented from  2009. They 
replace  and  limit  access  to  early  retirement  provision  for 
some  categories  of  workers.  This  is  temporary  solution  for 
workers who started work in special conditions before 1999. 
The  contribution  to  the  DC  scheme  has  been  reduced  from 
7.3%  to  2.3%  of  gross  wages  in  2011.  The  difference  has 
been diverted to the PAYG scheme. The contribution will be 
gradually increased to reach 3.5% in 2017 and thereafter. 

The newly re-elected Government has proposed to raise the 
current 65/60 (M/W) pension ages to 67, between 2013 and 
2020 (for men) and 2040 (for women). 

PT  made  a  major  reform  of  its  pension  systems  in  2007, 
which  entered  in  force  also  in  2007.  Retirement  age  was 
adjusted to 65 years. The main measures included extending 
the  assessment  period 
the  entire  career, 
disincentives  to  early  retirement,  diminishing  the  transition 
period,  and  the  introduction  of  a  "sustainability  factor"  that 
automatically  adjusts  benefits  to  changes  in  the  remaining 
life-expectancy-at-65-years. 

to  cover 

17.1/ 
20.6 

62.9/ 
62.3 ## 

65/65 

65/65 

- 

13.4 

- "reduce pensions above 1500€ according to the 
progressive  rates  applied  to  the  wages  of  the 
public sector as of January 2011, with the  aim of 
yielding savings of at least €445m" 

- "Suspend application of pension indexation rules 
and 
lowest 
pensions in 2012". 

freeze  pensions,  except 

the 

for 

EN 

36 

EN 

 
  
 
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Mem-
ber 
State 

RO 

14/ 
17.2** 

65.5/ 
63.2 # 

63y4m/5
8y4m 

65/60 

65/63 

n/a 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

Memorandum of Understanding 

towards 

indexing  public  pensions 

According  to  the  MoU  covering  the  period  2009-
2011  the  conditionality  on  the  pension  system 
reform  was:  "The  Government  finalises  the  draft 
of  a  revised  pension  legislation  (i)  to  gradually 
move 
to 
consumer prices rather than to wages, (ii) to limit 
the  scope  for  discretionary  pensions  increases, 
(iii) to phase-in pension contributions by groups of 
public  employees  currently  excluded  from  such 
contributions  and  (iv)  to  gradually  increase  the 
retirement  age  in  2015  particularly  for  women, 
life 
taking 
expectancies,  with  a  view  to  protect  vulnerable 
pensioners  and  to  attain  the  objective  of  45% 
replacement ratio for retirees on average" 

the  evolution  of 

into  account 

A  pension  reform  was  adopted  in  December  2010.  The 
reform  integrates  special  regimes  in  the  social  insurance 
one,  introduces  a  mechanism  for  recalculating  the  special 
pensions,  and  increases  the  retirement  age  to  65  years  for 
men  and  63  years  for  women  by  2030.  Early  retirement  is 
more strictly regulated,  while disability pensions are granted 
under  more  severe  conditions.  The  reforms  are  expected  to 
bring  important  savings  to  the  system  and  to  reduce  the 
number  of  beneficiaries.  Moreover,  the  government  has 
suspended 
that  would  have  seen 
contributions  to  the  mandatory  DC  scheme  rise  from  2%  to 
2.5%  of  employees’  gross  salary  in  2009.  The  scheduled 
increase  has  been  restarted  in  2010,  so  that  ultimately  the 
contribution  rate  would  reach  6%  of  wage  some  time  in  the 
future. 

legal  provisions 

According to the current MoU covering the period 
2011-2013, the conditionality refers to: "safeguard 
the 
the  pension 
system" 

term  sustainability  of 

long- 

SE 

18.3/ 
21.2 

64.7/64 

61-67 

61-67 

- 

7.4 (v, y) 

the 
the  automatic  balancing  mechanism 
In  2010 
adjustment  mechanism  of  the  income  pension  system  has 
been  smoothened  so  that  it  will  be  based  on  a  rolling 
average of 3 years instead of 1 year as previously in order to 
avoid  sharp  changes  of  the  pensions  in  case  of  economic 
downturn/upturn.  

in 

EN 

37 

EN 

 
  
 
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

16.8/ 21 

59.8# 

63/61 

63/61 

- 

2.6 

Mem-
ber 
State 

SI 

SK 

14/ 18 

60.4/ 
57.5 

62/57.5 -
61.5 
(depend-
ing on 
the no. of 
children) 

62/62 

- 

4.7 (v) 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

CSR  2-  Take  the  required  steps  to  ensure  the 
long-term  sustainability  of  the  pension  system, 
while  preserving 
the  adequacy  of  pensions. 
Increase  the  employment  rate  of  older  workers 
through later retirement, and by further developing 
active labour market policies and lifelong learning 
measures. 

the 

CSR  3-  Enhance  the  long-term  sustainability  of 
public  finances  by  further  adjusting  the  pay-as-
you-go  pillar  of  the  pension  system  also  by 
changing 
indexation  mechanism  and 
implement further measures with a view to raising 
the  effective  retirement  age,  in  particular  by 
linking  the  pensionable  age  to  life  expectancy. 
Introduce  incentives  to  ensure  the  viability  of  the 
fully-funded  pension  pillar  so  as  to  progress 
towards 
fiscal  sustainability  while  assuring 
adequate pensions. 

Proposed  pension  reform  (including  the  equalisation  of 
pension  ages  for  women  and  men)  was  rejected  in  a 
referendum in 2011. 

Slovakia  has  allowed  workers  to  opt  out  of  the  funded 
scheme and return to the PAYG scheme in 2008 and the DC 
scheme  has  become  optional  for  all  new  entrants  to  the 
labour market. 

In 2010, a legislative change was approved which stipulates 
the lack of income from work as a basis for entitlement to an 
early retirement pension.  

In  2011,  Slovakia  passed  changes  to  the  fully-funded 
pension  pillar  enabling  savers  to  regain  the  possibility  to 
invest  in  more  risky  securities  and  thus  potentially  attain 
higher  returns.  Moreover,  mandatory  participation  of  young 
people  will  be  reintroduced  as  of  01/04/2012  as  a  default 
option with the possibility to leave the scheme in the first two 
years of saving. 

EN 

38 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
Life 
expec-
tancy at 
65(i) 

Labour 
market 
exit 
age(ii) 

M/F 
(2010) 

M/F 
(2009) 

Pension 
age 
M/F(iii) 

(2009) 

Pension 
age M/F 
(2020)(iv) 

Increases 
in pension 
age after 
2020, M/F(v) 

Pension 
Fund 
assets % 
of GDP 
2009(vi) 

Mem-
ber 
State 

UK 

18.1/ 
20.8** 

64.1/ 62 

65/60 

66/66 

68/68 

73.0 (z) 

________________________ 

Pension Related Country Specific 
Recommendations (or Memorandum of 
Understanding references) 

Latest Reforms/Comments(vi) 

Access  to  basic  state  pension  has  been  improved  in  recent 
years, its uprating has been enhanced and workers are to be 
automatically  enrolled  into  occupational  schemes  (with  a 
possibility  to  opt-out)  from  2012.  Legislation  is  in  place  to 
increase State pension age to 68 from age 65 in stages from 
2020  to  2046.  Following  new  legislation  which  came  into 
effect  in  January  2012,  State  pension  age  is  now  being 
equalised  for  both  genders  by  2018  (previously  2020)  and 
this  also  brought  forward  the  timing  of  the  increase  in  state 
pension age from 65 – 66 by 5 ½ years, beginning in 2018. 
Proposals  for  accelerating  the  timings  of  the  subsequent 
increase from age 66 to 67 has been announced (but not yet 
legislated) and options for accelerating the increase from 67 
to 68 are under discussion. 

NOTES 

i 

ii 

iii 

iv 

v 

Source Eurostat: Population Statistics – Life expectancy by age and sex (last update 26/1/12) 

Average labour market exit age, M/W or Italics = totals (no M/W breakdown.) Source Eurostat. 

Statutory retirement age in general public pension scheme, Source MISSOC. 

Statutory  retirement  age  in  general  public  pension  scheme  after  implementation  of  legislated  reforms  (in  brackets  –  proposed  but  not  yet  legislated),  Source  Joint  Report  on  Pensions  "Progress  and  key 
challenges  in  the  delivery  of  adequate  and  sustainable  pensions  in  Europe"  by  the  EPC,  SPC  and  Commission  Services  (ECFIN  and  EMPL),  updated  by  Commission  where  aware  of  subsequent 
changes 

Statutory  retirement  age  in  general  public  pension  scheme  after  implementation  of  legislated  reforms  (in  brackets  –  proposed  but  not  yet  legislated),  Source  Joint  Report  on  Pensions  "Progress  and  key 
challenges  in  the  delivery  of  adequate  and  sustainable  pensions  in  Europe"  by  the  EPC,  SPC  and  Commission  Services  (ECFIN  and  EMPL),  updated  by  Commission  where  aware  of  subsequent 
changes 

vi 

Assets in pension funds (% GDP), 2009 Source OECD Global Pensions Statistics 

EN 

39 

EN 

 
  
 
 
 
 
 
(v) 

(w) 

(x) 

(y) 

(z) 

vi 

2008. 

Autonomous occupational pension funds only. In addition to these plans, total assets managed by occupational pension insurance contracts amounted to 99.3% of GDP. 

Autonomous occupational pension funds only. In addition to these plans, total assets managed by occupational pension insurance contracts amounted to 13.3% of GDP in 2008.   

Autonomous occupational pension funds only. In addition to these plans, total assets managed by the premium pension system amounted to 8.9% of GDP and assets managed by occupational pension insurance 
contracts to 38.9% of GDP in 2008. 

OECD estimate. 

Faced with the imminent population ageing and its impact on sustainability of pension provision, Member States have considerably reformed their pension systems. Tightening the link between contributions paid 
into the system and benefits paid out has been a key feature of reform efforts. This usually took form of moving from final pay or best years to lifetime earnings as the basis for benefit calculation and by insisting on 
a number of contribution years instead of solely on reaching a pensionable age, increasing the number of years required to receive a full pension, increasing the pensionable age for both genders or equalising it. Yet 
in most of these countries the higher eligibility ages for a statutory pension are phased in over long periods. 

* 2008 (for life expectancy at 65) 

** 2009 (for life expectancy at 65) 

Δ 2003 (Labour Market Exit Age) 

# 2006 (Labour Market Exit Age)  

## 2007 (Labour Market Exit Age) 

Δ Δ 2008 (Labour Market Exit Age) 

EN 

40 

EN