Special pensions in Europe should be abolished
Commission report: Reasons for ‘privileges’ are obsolete.
Dr. S-W – 05/2020
the EU Commission published a report on ‘Special Pensions in the EU’ as
Discussion Paper 125. It was written by Commission staff members Per Eckefeldt
and Anda Patatarau.
identifies basically two main types of special pension schemes:
Those for certain categories of persons, such as those in the civil service or
self-employed persons in agriculture, and special schemes or rules for persons working
under particularly arduous or risky conditions. Both systems are characterised
by special conditions, such as lower retirement age or higher benefits, that are
more favourable than those for other insured persons. These special pension
schemes exist in one form or another almost everywhere in Europe, with the
exception of Sweden, Cyprus and, according to the report, the Czech Republic in
the near future.
these special systems weigh on public finances varies. Poland is one of the countries at the top of
the list with public expenditure on special pension schemes representing up to 2.7 % of GDP. In comparison, the figure
for Germany is only 0.4% of GDP, despite its special pensions for civil
servants, which clearly puts it at the bottom end of the list. The significance
of special pensions in Poland is also expressed by the fact that 22.3% of all pensioners
are covered by such schemes.
report notes that recent national reforms indicate that the advantages
associated with special pensions are being reduced or even phased out. It leaves no doubt that this is the right way
to reduce unjustified privileges. In the Commission’s view, the reasons behind
special pension schemes have become obsolete or may have even have always been
a misguided approach, partly due to trade union initiatives. Work under
difficult or strenuous conditions should be compensated for by higher wages,
which automatically results in higher pension benefits.
same result could be achieved by higher employer contribution rates or focusing
on supplementary pension schemes for particularly arduous jobs. It is worth
noting that the authors do not mention that an option would be to reduce the
amount of arduous work that is dangerous to a person’s health or offer early
retirement for such work.
can be read here.