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

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

3. 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

4. Trend of raising retirement age in the OECD countries

5. Legal retirement age in the EU countries

6. 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

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

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

9. 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

10. 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.

11. 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

12.  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

13. 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

14. 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.

15. 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.

16. 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.

17. 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.

18. 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

19. 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

20. Impact of changes in early retirement

21. Average retirement age and inflow to old-age pensions

22. 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