mast image

Impact Investing

IPE special report May 2018

Sections

EU says countries have more to do on pensions

EUROPE - The European Commission has released its assessments of a number of European countries' progress towards economic convergence, and found more to do in terms of pension reform.

The countries under scrutiny include Belgium, France, Germany, Ireland and Italy. Below are some of the relevant comments from the Commission's reports on each country.

- Belgium: "As regards initiatives to address low employment rates, the programme announces negotiations between social partners and the government which should result in new measures to limit access to the system of early retirement and to increase further the effective number of working years on the basis of social agreements.

"However, the outcome of these negotiations is still uncertain. All in all, the process of removing incentives to early retirement remains slow and few new concrete initiatives have been announced."

- France: "There are some risks with regard to the long-term sustainability of the public finances on grounds of the large projected budgetary cost of an ageing population.

"This is despite the implementation of major structural reforms of the pension and health-care systems in 2003 and 2004 respectively. In the absence of further reforms, additional consolidation would thus also be needed in the years ahead."

"France has implemented major structural reforms, notably concerning the pension and health systems, which place it in a better position to face the consequences of an ageing population."

- Germany: "Germany appears to be in a relatively favourable position with regard to long-term sustainability of the public finances, of which the projected budgetary cost of an ageing population is an important element. However, long-term sustainability hinges crucially on the achievement of the planned budgetary consolidation in the medium-term.

"The already legislated structural reforms and in particular the pension reform is likely to reduce the budgetary impact of ageing. However, the exonerating budgetary impact of the ongoing reforms is subject to considerable uncertainty, and the update concedes that further measures are needed to contain notably health-related expenditures."

- Ireland: "Ireland appears to be in a relatively favourable position with regard to the long-term sustainability of its public finances, despite significant projected budgetary costs of an ageing population.

"The relatively low debt ratio in Ireland, the pension reform measures already enacted and the accumulation of resources in the NPRF all contribute to budgetary sustainability and help cope with the impact of ageing.

- Italy: "The framework law on the pension reform adopted in 2004 is an important step towards addressing the budgetary consequences of aging population. A full implementation of the reform is expected to reduce expenditure by around 0.6-0.7% of GDP between 2011 and 2033 with the tightening of eligibility conditions scheduled to take effect only in 2008 taking the form of a sudden and sharp increase of the retirement age required for seniority pensions.

"Conditional on the full implementation of the budgetary targets and the recently adopted pension reform, Italy would achieve a sustainable path."

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2435

    Asset class: CLOs.
    Asset region: Global.
    Size: USD 50m.
    Closing date: 2018-05-22.

  • QN-2436

    Asset class: Real Estate - Core Open-ended Real Estate Equity Fund (non-listed).
    Asset region: Asia Pacific.
    Size: Approx. CHF 70-100m per investment.
    Closing date: 2018-05-25.

  • QN-2438

    Asset class: High Yield Bonds.
    Asset region: US.
    Size: USD 300 million.
    Closing date: 2018-05-25.

Begin Your Search Here