The Eurogroup has agreed to benchmark the fiscal sustainability of euro-area countries’ pension systems as a tool to guide potential further reform.

The group of euro-zone finance ministers reached the agreement at a meeting yesterday.

Ministers want to assess the fiscal sustainability of pension systems and benchmark these against the best performers of the euro-area using two key indicators and further “flanking” indicators. The two key indicators measure medium- and long-term sustainability risks, focusing on the impact of pension spending.

The “flanking” indicators include the legal and effective retirement age, and the pension benefit ratio, level and evolution.

The Eurogroup will conduct the benchmarking exercise for the first time next year, and thereafter every three years. It will be carried out in the context of “existing processes and surveillance mechanisms, in particular the Ageing Reports and the assessment of the Stability Programmes”.

Speaking to the press after yesterday’s meeting, Jeroen Dijsselbloem, Dutch finance minister and president of the Eurogroup, said: “I am very happy about this agreement.

“This is the second benchmarking exercise the Eurogroup has agreed to. The first one was the benchmark on the tax wedge on labour which we started in September 2015. So this is the second one on the sustainability of pension systems and I think that will help to deepen our work on fiscal sustainability in macroeconomic imbalances.”