Tuesday, May 01, 2018

European Community Issues Triennial Pensions Adequacy Report

According to the 2018 Pension Adequacy Report, there are 1.9 million fewer older Europeans at risk of poverty or social exclusion than a decade ago, while the number of older workers in employment has increased by 4.1 million in the last three years alone. However, the report urges that the European Community not be complacent: some 17.3 million or 18.2% of older people (aged 65 and over) in the European Union remain at risk of poverty or social exclusion, an amount that has remained nearly unchanged since 2013.

With respect to older workers, the report's findings include:
11. As people remain on the labour market for longer, the employment in the age
group 55–64 grew by 5.1 percentage points or 4.2 million workers (2.2 million
women and 2 million men) in the years 2013-2016, following the trend of the past
10 years. Later retirement is the most important factor behind the growth in
employment; this is also an effect of pension reforms. The share of pensioners in
this age group strongly decreased, while the share of unemployed and those unable to
work due to illness or disability increased slightly. Gains in older people’s labour
participation can also be attributed to new, better-educated age cohorts replacing
previous ones. Depending on specific country situations, effective policies to boost
participation vary from investing in early education to improving access to lifelong
learning, and from improving health conditions to promoting active ageing and age
management in the workplace.

12. As life expectancy improves, longer working lives will be vital to enable men and
women to acquire adequate pensions. People retiring in 2056 will have lower
pensions compared to their work income than a similar career would have
earned them in 2016. Pension systems can promote longer working lives by adjusting
pensionable ages (e.g. by increasing the statutory retirement age to reflect life
expectancy gains), pension benefits or career length requirements, rewarding later
retirement and discouraging early exit. The strength of (dis-)incentives varies across
countries. At the same time, flexible retirement options, including possibilities to
combine pension with income from work, and tax incentives promoting later
retirement are becoming increasingly widespread.

The 2018 edition of the triennial Pension Adequacy Report ("The 2018 Pension Adequacy Report: current and future income adequacy in old age in the EU") analyses how current and future pensions help prevent old-age poverty and maintain the income of men and women for the duration of their retirement. Volume I is devoted to comparative analysis of pension adequacy in the 28 member states of the the European Community. Volume II provides a more detailed description of the pension system and pension adequacy in each of the 28 states.

Source: European Community Press Release (May 1, 2018)

No comments: