Towards adequate

ate, sustainable and

safe European pension systems
Green paper
UNIZO

Anne Vanderstappen
UNIZO Study Department
How can the EU support Member States’ efforts to strengthen
the adequacy of pension systems? Should the EU seek to
define better what an adequate retirement income might entail?

reliminary remarks:
• Adequacy and sustainability are two sides of the same coin:
no adequacy without sustainability and vice versa
• Broader perspective than providing an income to older
people:
• Ownership of a house;
• Good and payable old age provisions;
• Well developed health care;
• …..
How can the EU support Member States’ efforts to strengthen
the adequacy of pension systems? Should the EU seek to
define better what an adequate retirement income might entail?
tirement income in Belgium:
• 3 pension systems: for employees, self-employed
employed persons and public servants;
• An income guarantee for older people (≥ 65) = IGO (inkomensgarantie voor ouderen) / Grapa (la
(
garantie de revenu aux personnes âgées)

mparison with poverty line EU-SILC

SILC 2008 (60% of median national equivalent income):

employed IGO/Grapa Poverty line EU-SILC 2008

al rights 01/08/2010 employees Self-employed
pension 1.255,73 1.233,43 1.221,78 1.888 (2 adults/2 children)
pension 1.004,87 945,61 916,33 899
or's pension 989,07 945,61 916,33 899
ow can the EU support Member States’ efforts to strengthen
e adequacy of pension systems? Should the EU seek to
efine better what an adequate retirement income might entail?
ments for a European definition on
n adequate retirement income could
Besides providing an income: ownersh
rship house, old age provisions, health car
Income guarantee for older people (≥ 65) equals the poverty line, after examin
of resources;
Income guarantee may never exceed d tthe minimum pension rights (after paym
social contributions on income out of work);
Minimum pensions (payment of social
ial contributions) at least 10% higher than
income guarantee (no payment of social contributions);
Avoid big differences between professional groups (employees, self-employed
self
persons…) in support of entrepreneurship
2. Is the existing pension framework at the EU-level
EU sufficient to ensure
sustainable public finances?

e Stability and Growth Pact (SG

SGP) provides the framework fo
monitoring the sustainability of public finances, including
pension systems.
hieving a sustainable balance between time spent in work and
irement
lowing principles are important for UNIZO :

• Working as long as possible;

• Increase effective retirement age
e ((59,7) more important than increasing th
retirement age (65);
• Real worked career is more important than a legal retirement age
• Pension in function of real worked
ed career => pruning assimilated periods:
• Unemployment
• Bridging pension/Early pension
• Leave scheme (time credit and career break)
⇒ Exceptions for incapacity for work,, m
maternity leave, parental leave and leave for pall
⇒ Alternative for assimilated periods = backpack of 2 or 3 years
hieving a sustainable balance between time spent in work and
rement

The third question of the gree

een paper suggests an interestin
idea:

• Introduction of an automatic
tic adjustment mechanism related to
demographic changes in pe pension systems in order to balance
time spent in work and in retirement;
• Possible role for the EU: dev
development of the mechanism and
monitoring afterwards
tions concerning the supplementary pension funds

• Improve the conditions for cross-border

cross activity: yes but…
• Removing obstacles for mobility: yes but…
• Ensure a consistent regulation
on and supervision of funded pensio
schemes and products: yes but…
• Modernising the current minimu
imum information requirements for p
products: yes but….

• Yes but… without increasing ing the financial and administrative c

for employers/entrepreneurs especially for SME’s
=> Think small first (small business act (2008))