Public service trade unions have outlined their priorities for pension reform in Europe, saying that pension schemes are "one of the pillars on which the social future of Europe will be built". They are unhappy that so little consideration is being given to their concerns in the ongoing pension debate.
The priorities of the European Federation of Public Service Unions (EPSU) were outlined in a resolution adopted on June 16, during its annual congress in Stockholm, Sweden. These priorities are: to make sure that less of the burden of risk is shouldered by workers; that pension funds are invested in socially responsible companies; and that pensions benefit society as a whole rather than particular companies.
In terms of the burden of risk, the EPSU suggests moving away from defined-contribution schemes, which pay according to how the contributions have grown over the years, to defined-benefit schemes, where the value of pensions are determined by the final salary.
To promote social responsibility, EPSU thinks that more restrictions should be placed on the companies that pension funds can be invested in. For example, pension funds should not be investing in companies that employ child labour or are anti-union.
The EPSU thinks that pension schemes should benefit society as a whole, rather than individuals or particular companies. This is why the organisation favours a "pay-as-you-go" approach to pension contribution over capitalisation schemes.
With a "pay-as-you-go" approach, everyone in society contributes in a defined way to the pension system, although there is a danger that new political decisions may change the "social contract between generations". With capitalisation schemes, workers and/or employers save for their own future pensions, resulting in the value of pensions being dependent on investment results and the length of investment.
However, the EPSU notes that capitalisation schemes could be improved by promoting collective agreements that cover specific sectors. This would ensure security and independence from a single employer.
Spokesman Brian Synnott stresses that the EPSU resolution on pensions is only the first step in European level co-ordination between trade unions. Due to the complexity and diversity of pension systems across Europe, a detailed discussion of the issues involved has been left for a later date.