EU sustainable report
The European Commission’s draft report on sustainable pensions provisions in Europe includes an analysis of the pensions system in each member state, the main conclusions of which are summarised below.
Belgium: “Further adaptations to the pension system are needed to respond in particular to the needs of atypical workers and the self-employed.” Although public pension sending is likely to rise, it may be manageable due to large primary surpluses – though the report says there is “some concern” about this as public finances move into deficit.
Denmark: Strategy to maintain adequacy and sustainability seems “appropriate” under present policy, though sustainability calculations “hinge critically” on maintaining large surpluses in public finances over the next decade.
Germany: Further efforts needed in terms of adequacy and modernisation, despite 2001’s pension reform. Important for social partners to develop occupational pension schemes that are accessible to all.
Greece: Recent reform “falls short” and there is scope for improving the system by raising employment and curbing “contribution evasion”. The overall viability of the pension system cannot be ensured without addressing its financial sustainability as well.
Spain: Facing a major challenge in terms of financial sustainability, with “significant” reform needed. Some steps taken in the right direction, such as setting up of reserve fund. Need to grow employment rates.
France: “Significant” further reforms are needed. Report says major reform planned for 2003 will not change basic structure of the present system. Strong political consensus will be needed to push reform through. Government needs to develop “effective and sustainable” strategy to get older workers into the workforce.
Ireland: A “clear commitment” to improving adequacy and good progress to ensuring financial sustainability.
Italy: Major challenge in high overall contributions to the pension system and need for large government transfers. Need to raise employment levels among women and older workers.
Luxembourg: High level of adequacy, though financial sustainability hinges on contributions of non-resident workers.
Netherlands: Budget surplus strategy and employment policy should enable the necessary rise in public resources but there is concern over the success of such a policy. Performs well in terms of adequacy.
Austria: High spending levels poses “considerable’ challenges for public finance. Report welcomes Austria’s reform plans.
Portugal: Adequacy “remains a challenge”, though recent measures to raise minimum pension should alleviate poverty risks. Some scope for the development of private pension provision.
Finland: Progress towards financial sustainability and adequacy. Overall strategy depends on maintaining large surplus in public finances “for a long time”.
Sweden: “Should be able to deliver adequate pensions in a financially sustainable way”. Occupational schemes based on collective agreements are well developed.
UK: Some progress towards “adequacy challenges”, though some measures will take decades to develop. Financial sustainability “well under control”.