BELGIUM - Belgians should work until they are 70 years old, while at the same time the rate of employment among those over 60 should be increased dramatically, according to Ivan Van de Cloot and Jean Hindriks of the Belgian Itinera Institute.
Only by combining these two measures can further erosion of the Belgian pensions system be stalled, they said.
The Itinera Institute, which profiles itself as an “independent think tank”, calls for the revision of the Belgian social compact as the pension system suffers from “false or perverse solidarity”.
The think tanks said retirement savings to benefit the baby boom generation were falling short, despite the fact this generation had worked “en masse”.
It also said, in the current system, people with “unacceptably short careers” were being subsidised by those working longer.
Half-hearted measures will not rectify the problem, according to Hindriks and Van de Cloot. The problem will be tackled only by working longer, while simultaneously increasing the number of seniors in the work force, they said.
In their recently published ‘Pension book’, they argue that progressively raising the pensionable age to 70 by 2050 will not suffice to stabilise the retiree-to-worker ratio unless labour participation by seniors - which now stands at 19% for those over 60 - is increased as well.
The authors allow for some flexibility, granting seniors the right to cut back on working hours and take part-time pension benefits - as long as they themselves foot the bill.
Whoever opts to take part-time retirement and not work till old age should pay for the privilege, they said.
Those who do work full-time up to 70, however, will be made to pay as well: increasing the labour force participation rate of seniors should be achieved not just by creating more jobs but also “by putting an end to automatic wage increases related to age”.
In effect, Belgian workers would be required to work longer for less pay.
Critics have been quick to point out that the onus of keeping the pension system afloat would be shifted to employees.
The 1.5m member Belgian trade union ABVV has called the proposals “unambiguously anti-social” this week.
An online survey by the job site associated with Belgian Daily De Morgen showed that more than 80% of respondents opposed to the Itinera Institute pension revision proposal.