EUROPE - A member of the European Commission has argued that encouraging employees to continue in work until the statutory retirement age is key to tackling Europe's demographic problems.

Speaking at a conference in Brussels organised by the think tank European Policy Centre (EPC), Ralf Jacob, head of the European Commission's social and demographic analysis department, said he was optimistic about staving off a pensions crisis.

While he declined to predict the contents of the Commission's White Paper on Pensions, scheduled for publication September and accompanied by an Impact Assessment Study looking into financial implications for various options, Jacob made three suggestions to combat the stresses of demographic change.

He argued there was a need to emphasize balance between time spent at work and in retirement, as well as an increased effective retirement age and an extension of actual working life by encouraging the ability of employees to work until they reach statutory retirement age.

He further talked of possible reforms to flexibility in scheme benefits, such as gradual retirement, and urged a debate on retirement ages for those with lesser employment opportunities.

Jacob also announced that next year would see the publication of an Ageing Report, updating findings from 2009 and re-examining the effects of ageing on public expenditure.

EPC chief economist Fabian Zuleeg also focussed on the issue of working into old age, noting that a large proportion of the European population was not employed.

Zuleeg said there were numerous reasons for this inactivity differing from country to country, but that in the 55 to 64 age group, less than half Europe's population was in employment, while countries such as Hungary, Malta and Poland only had a third of the age group still as an active workforce.

He indicated Sweden as a role model, where 70% of this age group were still in work.

"Labour market participation is crucial. It is at least as important as the demographic profile", he said, adding that it allowed for additional opportunity for manoeuvre.

He advocated that the attitude to being in work should be seen as "positive" and criticised the concept of an "arbitrary, administrative age of retirement, such as at 65". Progress should include removing "punishment" for working longer.

Commenting on the possibilities offered by increasing labour market participation, Mr Raphaël Hadas-Lebel, president of Conseil d'orientation des retraites (COR), said the shift to older people having higher salaries would be a "revolution".

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