Old-age pensions

The aim of any old-age pension insurance system is, without question, to ensure an adequate standard of living in old age while taking into consideration the financial sustainability of the system. However, opinions can vary widely in terms of what this means specifically and what measures must be put in place to achieve this goal. 


The suggestion by the EU Commission that statutory retirement age be linked to life expectancy as part of the Social Pillar is particularly problematic. This not only qualifies the “minimum income provisions” for the elderly which have already been brought into play, it is also a good example of aligning a strategy which is by no means only limited to promoting social rights or the primacy of “upward convergence”. 


In fact, the EU Commission’s proposal to automatically link retirement age with increasing life expectancy leads to a one-sided fixation. The decline in the ratio between contributors and retirees as a result of demographic change can be countered by various measures.  


However, ultimately it is crucial that the decision of how to effectively and efficiently achieve an adequate and sustainable national pension system under the respective conditions of each country should be made by each of the Member States and not at EU level. 


With regard to the gender pension gap addressed by the EU Commission, this is not at all due to alleged shortcomings in the pension system, quite on the contrary. The gender-neutral calculation of pensions means that the total pension benefit that women receive is higher than that of men because the life expectancy of women is on average higher. However, in many cases where the pension is lower, this is mainly due to differences between men and women in their participation in the workforce or gender-specific differences in remuneration. Pension systems can only play a supplementary role by providing a certain number of “credits” for raising children. The Member States determine if this is the case, how much and for how long.  

More important than ever – learn from one another

There are a number of challenges that lie ahead for the social insurance systems in Europe, challenges that each of the Member States will try to deal with in their own way. It will be particularly important to learn from one another through the increased use of peer reviews. Systematic comparisons and the exchange of best practices between the Member States help them to inspire one another to progressively develop more modern (and better) social security systems. As comparisons between countries will always be flawed in terms of their accuracy and reliability, their ability to be used as a “blueprint” for national reforms is limited. To avoid false conclusions regarding policy, the results of systematic comparisons should be interpreted taking into account national specificities, before policy conclusions are made at the relevant national level.