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Raising retirement ages is a start - Mercer

EUROPE - European governments are acting to tackle the growing pressure on retirement income, but doing so puts them at increase odds with their voters, according to consulting firm Mercer.

A study into state retirement ages indicates government representatives do acknowledge the funding of pensions can no longer be handled solely by the state as most European governments are now acting to increase their minimum age ranges.

More specifically, women's retirement ages are increasingly being rationalised to match the state normal retirement age of men.

But doing so, notes Yvonne Sonsino, head of Mercer's international retirement business in the UK, means the strike scenes witnessed in France and Greece recently could be a reflection of further pressure to come.

"Western Europe is in a particularly difficult position with an ageing workforce an a history of generous social security provision. Passing pension legislation faces the enormous challenge of politicians seeking to retain the support of their voters. Recent strikes and disturbances in France have highlighted the sensitivities involved but also the seriousness of the issues," said Sonsino.

State normal retirement age increases
                               Men            Women          Time period
Austria                                       60 to 65         2024 - 2033
Belgium                                     64 to 65         2009
Czech Republic   63                59-63              2013
Denmark               65 to 67      65 to 67          2024 - 2027
Germany               65 to 67      65 to 67          2012 - 2029
Hungary                62 to 65      61/62 to 64    2020
Hungary                69               68                   2050
Italy                        57 to 61      57 to 61         2013
Turkey                   60                58                 insure pre Sept '99
Turkey                   41 to 56      41 to 56         insure Sept '99+
UK                         65                 65                  2020
UK                         68                 68                  2024 and 2046

Mercer colleague Giles Archibald notes governments are moving to increase their retirement ages, as the table shows, yet additional work is needed to ensure longevity is sufficiently tackled.

"Governments are increasingly looking to the private sector to supplement social security - placing more pressure on employer resources. However, as social security is eroded, so innovative company-sponsored retirement plans are becoming a more attractive for companies to recruit the best talent and remain competitive," said Archibald.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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