Agnieszka Chłoń-Domińczak Moscow, March 30th 2017 Privileged, hazardous and early retirement EU policies and Polish experience Agnieszka Chłoń-Domińczak Moscow, March 30th 2017

Outline European experiences with early retirement policy due to hazardous and ardous conditions How early retirement was reduced in Poland?

Early retirement: recent trends Increasing retirement age and longer working lives are one of the policy directions under Europe 2020 Strategy Also in line with ILO Recommendation No 162 Due to population ageing and longer life expectancies: tendency to rise retirement ages in Europe Early retirement should not be seen as a policy to deal with labour market tensions – the more people have early retirement benefits, the higher the tax wedge

Trend of raising retirement age in the OECD countries

Legal retirement age in the EU countries

Early retirement is differently understood: Retirement age of persons using an early retirement scheme, persons not using an early retirement scheme, and their difference, 2012

Looking at two sides of the coin: work ability and related factors

End-of-career policy mix in the EU countries Source: Natali et al. (2016) – European Social Protection summary report

Hidden cost of early retirement Wide use of early retirement reduces the size of active labour force participants As a result, the pension system not only has higher expenditure, but also lower contribution revenue Changes in retirement age introduced in the EU countries will also contribute to potentially higher employment and more sound finances of pension systems

Early retirement practice in Europe – tightening access Very long career records – increasing career requirements (Austria, Belgium, Bulgaria Reducing number of early retirement years (Belgium, Bulgaria, Spain, France) Closing the gap between early and legal retirement ages Conditioning to certain categories of workers: Disability Health status Difficult working conditions etc.

Benefit calculation One of the policy measures is to make pension benefits less attractive: Cutting pensions proportionally to the length of anticipation Reduction of benefit conditional to length of career record Reduction calculated according to the age Flat-rate reduction Reduction depending on the status of the person But also providing incentives to work longer through higher increases of pensions

 Country Incentives Level of penalty Penalty Bonus Belgium x   Bulgaria Czech Republic 0.9% per 90 days in the 1st year, 1.2% per 90 days in the 2nd year; 1.5% per 90 days further up to the 5th year Germany 0.3% for each month Estonia 0.4% for each month Greece 0.5% for each month Spain 1.875% for every quarter if involuntary termination and 2% if voluntary termination France 1.25% for each missing quarter Croatia Between 0.1% to 0.34% per month on anticipation Cyprus Lithuania Hungary Austria 5.1% per year Portugal Slovenia Slovakia Finland UK

Bridging pensions in Poland – basic assumptions Criteria of early retirement: designed from scratch following definitions proposed by medical experts 3 medical committees working between 1999 and 2008 Separation from general pension scheme Separate contribution (1,5%) plus state budget financing covering the liabilities before 2008 Separate fund: Bridging Pensions Fund Limited in time Covering only workers who started employment in special conditions before 1999

Work in special conditions Work performed in conditions under risk factors, which with age can, with a large probability, cause a permanent health damage, performed in special conditions of work environment, determined by forces of nature or technological processes, that despite of application of available means of technical, organisational or medical prophylactic face workers with requirements that exceed their capabilities, limited to due ageing process before reaching retirement age, to the level which makes it impossible to perform work at current workplace.

Work in special conditions Risk factors determined by the forces of nature: work under ground, work on the water, work under water, work in the air.

Work in special conditions Risk factors determined by technological processes: work in hot conditions of a microclimate — work performed in the premises in which the value of the thermal load index WBGT is 28°C and above, and the level of metabolism of and employee is above 130 W/m2, work in cold conditions of a microclimate — work performed on the premises of the air temperature below 0°C, very heavy physical work — work that over a shift requires an effective energy expenditure exceeding 8400 kJ in a case of men, and exceeding 4600 kJ in a case of women, works in conditions of elevated atmospheric pressure, heavy physical work associated with very high static load resulting from having to work in a forced, unchanging posture of the body; heavy physical work is defined as requiring an effective energy expenditure over a shift exceeding 6300 kJ for men and exceeding 4200 kJ for women, and works in forced posture requires a significant tilt and (or) back sprains while putting force in excess of 10 kG for men and 5 kG for women (according to the OWAS method category item 4) by at least 50% of the work shift.

Work of special nature Work requiring special responsibility and special psychophysical performance, whose ability to discharge in a manner not prejudicial to public security, including the health or life of other persons diminishes before pensionable age as a result of the deterioration of psychophysical efficiency associated with a process of individual aging.

From types of work to workplaces Work in special conditions Work of special nature Painting, riveting and assembling pieces of equipment in very small areas with difficult ventilation (double bottoms of ships, tanks, pipes, etc.). Ship hulls fitter Riveter Ship painter ...... Ship pipe fitter The driver of traction engines in public transport Driver of traction engines Driver-instructor Driver multipurpose and heavy engines for construction of the railway and railway traction network Assistant of driver of traction engines

Comprehensive approach Changes in early retirement through bridging pensions Activation of older workers – Program 50+ Further extension of legal retirement age in 2012 (to 67 for men and women), but reversed in 2017

Impact of changes in early retirement

Average retirement age and inflow to old-age pensions

Key success factors in Poland Co-operation with medical experts and use of evidence in reform proposal Integrated approach combining measures in pension policy and employment policy Maintaining dialogue with social partners Comprehensive approach limiting all potential routes to early retirement