Presentation on theme: "EPC/SPC Joint Report on Pensions Aurelio Fernández – SPC Chair Assuring adequate pensions and social benefits for all European Citizens Liège, 7-8 September."— Presentation transcript:
EPC/SPC Joint Report on Pensions Aurelio Fernández – SPC Chair Assuring adequate pensions and social benefits for all European Citizens Liège, 7-8 September
EPC/SPC Interin Joint Report on Pensions (General Objectives) - Better coordination of the work on pensions at european level: - Ageing implications for long-term sustainibility of public finances (AWG) - OMC work on pensions (adequacy, sustainibility, modernisation of social protection systems -SPC) -Apply a holistic approach to pension policies: -Shared similar fundamental challenges but also considerable diferences. -Assess progress of pensions reforms and current strategies. -Develop an update agenda to assure adequate and sustainable pensions in EU Member States.
EPC/SPC Interin Joint Report on Pensions (General Objectives II) Adequacy and sustainability two faces of the same coin. Member States need to strike and adequate balance between adequacy and sustainibility. This aim will benefit from: -Better coordinated work at EU level. - Better measurement and stronger data
Achievements of reforms and adequacy Reforms have brought important progress, notably in sustainability for public pensions schemes, and to various degrees also in some aspects of adequacy and minimum income provisions for older people in particular. With many reforms the challenge increasingly turns to achieving adequate replacement levels while ensuring sustainability: - Extending working lives - Strengthened link between contributions and benefits - Development of supplementary pensions schemes
Concerns about adequacy There are signs that ongoing reforms might bear considerable risks in terms of adequacy As changes in pensions systems tend to make benefits more contingent on developments in labour and financial market, important risks relate to employment rates not increasing enough or capital market not delivering as expected.
Adequacy concerns for all types of pension schemes have been aggravated by the crisis. Pensions maybe affected by unemployment periods and lower contributions. Accumulation of pension rights by younger generations maybe also affected by later entrance to the labour market. Acute public budget problems in a few member states have produce adjustment in public pensions payments. The crisis has strongly reduced the market value of pension fund assets.Present crisis show that differences in design, regulation and investment strategy in funded schemes matters. Interaction between public and private pillars need to be addressed when monitoring adequacy
Importance of monitoring closely adequacy implications of these developments - Replacement rates. - Risk of poverty among pensioners. - Impact of reforms on men and women - Career brakes and pension rights - How reforms affect careers and expectations of workers of different socioeconomic levels. - Pensions rights and atypical forms of work. - Balance of risk sharing to ensure safe and appropiate returns from the financial markets
EPSCO requests to SPC EPSCO Conclusions 7 of June 2010 - To follow closely the evolution of minimum pension and minimum income provisions (mp/mips) for OP in Member States. - To examine the interrelation between the maturing of social security reforms and mp/mips. - To address the issue of adequacy of the total pension package (public/private) components while taking into account the need to secure long-term sustainability. - To analyse and identify good practices in the articulation of mp/mips for OP with other related policies ( Health promotion, access to services, active ageing strategies, etc).
EPSCO invitations to the European Commission EPSCO Conclusions 7 of June 2010 -To consider how to enhanced cooperation on concepts, measurement and data related to pensions systems. -To pursue further work at EU level aimed at the use of pensions administrative data and modelling tecniques in pension systems analysis and assessments of reforms
Assuring pensions adequacy and sustainability will depend also on other related policies Only around 40% of people at the age of 60 remain in employment. Increasing effective retirement ages, a key policy objective. Adjustments in age management in work places will be further neccesary Financial incentives to remain active. Policies to tackle age- discrimination, promote life-long learning, flexible retiremente pathways and healthy jobs opportunities for older workers, need to find a place in the recovery strategies
EPC-SPC future collaboration Something neccessary for a coherent and for a holystic approach to pensions at EU level For a better implementation of the EU2020 strategy. OMC work on pensions adequacy remains essential.