Progressive retirement in Europe
Progressive retirement schemes have been introduced in a majority of European Union countries (and Norway), allowing workers approaching retirement age to cut their working hours and receive some form of income support to make up for the shortfall in pay. With the importance of retaining older workers in employment and cutting the burden on pension systems increasingly being recognised (and promoted by the EU), greater attention is being paid to progressive retirement. This comparative study analyses the extent and utilisation of progressive retirement, its regulation by law and collective bargaining, the main features of the existing schemes, and its role and importance in the current debate between governments and social partners.
One of the measures that have been implemented in order to encourage participation by older people in the labour market in a number of European countries is 'progressive retirement'. Progressive retirement aims at retaining older people within the active population by decreasing their working time and, at the same time, granting some sort of income support measure. For example, a scheme might allow older workers to work half-time from the age of 55 until full retirement age, receiving pay for the time spent in work and a pension or other financial compensation for the remainder of the time. There may be a number of reasons for supporting such arrangements: first, it may help reduce the social exclusion of older people; second, it may represent an important way to keep valuable competence and skills within firms and transfer know-how to younger employees; third, it may reduce the burden on pension systems, insofar as it keeps people working longer than they would do otherwise.
Progressive retirement schemes may be seen within the European Union Employment Guidelines' call on Member States to 'develop policies for active ageing with the aim of enhancing the capacity of and incentives for older workers to remain in the labour force as long as possible, in particular by: adopting positive measures to maintain working capacity and skills of older workers, to introduce flexible working arrangements and to raise employers' awareness of the potential of older workers'. At the same time, they can be part of the social partners' strategies to address economic and corporate restructuring, in order to retain valuable know-how within firms as well as to 'soften' redundancy plans and exit from employment. Moreover, progressive retirement may represent an alternative to expensive 'full' early retirement schemes and ease the reform and financial restructuring of national pension systems. In fact, the attractiveness of progressive retirement may well be that it allows for all these objectives to be combined.
By focusing on progressive retirement, this study analyses a particular aspect of the policies aimed at facing the implications of the ageing workforce in Europe, which were addressed more broadly by the recent EIRO comparative study on 'Industrial relations and the ageing workforce: a review of measures to combat age discrimination in employment' (TN0010201S).
This comparative study focuses on progressive retirement schemes in the European Union and Norway. In particular, it analyses the diffusion and utilisation of progressive retirement, its regulation by law and collective bargaining, and its role and importance in the current debate between governments and social partners, notably as far as pension system reforms and the issues raised by an ageing workforce are concerned. The study is based on information provided by the European Industrial Relations Observatory (EIRO) national centres in each of these countries in response to a questionnaire. The national reports, which contain more detailed information on the national provisions summarised here, are available separately on the EIRO website, along with the questionnaire.
Diffusion of progressive retirement arrangements
The picture which emerges from the EIRO national reports shows a quite uneven distribution of progressive retirement arrangements in the countries covered by the study. Progressive retirement is present in the majority of countries. These are Austria, Belgium, Denmark, Finland, France, Germany, the Netherlands, Norway, Spain and Sweden.
However, the issue of the transition from work to retirement is attracting more and more attention in many countries - see table 1 below - the exceptions being Greece, Luxembourg and Ireland, though in Luxembourg and Ireland the issue is seemingly starting to emerge. There is a widespread debate on the introduction of periods characterised by a reduction of working time in order to 'soften' (and, in rare circumstances, delay) the exit from work. The particular features that this debate has in any country vary depending on the main objectives that progressive retirement is supposed to help attain. In general, the discussion centres on three broad goals that can be assigned to the introduction of partial retirement:
- the reduction of the financial burden imposed by national pension systems. Partial retirement is seen as a means to control the cost of pensions and to redress the imbalances induced by demographic trends;
- the provision of equal opportunities in employment for older people. The decrease in working time and effort allowed by partial retirement is considered an important incentive to support the retention of older people in the active population or, at least, an essential step to provide an alternative to early retirement. The fundamental aim is to support the employment of older workers; and
- the mitigation of labour shortages. With a view to coping with the effects of demographic trends on labour supply (rather than on the financial equilibrium of pension systems as in point 1 above), the prolongation of active life is seen as an important source of 'additional' labour, often characterised by high levels of skill and qualification.
Of course, these three objectives are greatly intertwined and the existence of partial retirement arrangements has an impact at the same time on all three dimensions (financial sustainability of pension systems, age discrimination and labour shortages). In each country concerned, all three issues are usually taken into consideration, though the public debate may highlight a particular goal and the actual implementation of partial retirement may be designed to address specifically - or to a large extent - only some of them.
| Country | Debate on progressive retirement |
| Greece | Not an issue. |
| Ireland | Not an issue for the social partners. The government is trying to push for the introduction of flexible retirement to cope with labour shortages. |
| Italy | The main issue is the revision of the 1995 pension system reform and the debate focuses, as far as flexible retirement is concerned, on the voluntary postponement of retirement. Some measures to promote part-time work for employees approaching retirement, in connection with the recruitment of young people, were for the first time envisaged in 1997 by law 196/97, but they have not been implemented yet. |
| Luxembourg | Not an issue. However, the social partners are discussing pension reform. The debate focuses essentially on the funding and sustainability of the system and centres on the amount of pensions and on disability pensions (LU0108175F). |
| Portugal | Not an issue. The reform of the pension system was a crucial topic in the 1990s. The emphasis is now on the improvement of social protection, the fight against social exclusion and the reinforcement of the system's financial sustainability. |
| UK | Progressive or flexible retirement is a major issue for both the government and the social partners, notably the employers grouped in the Employers Forum on Age. |
Source: EIRO.
Existing progressive retirement schemes
Two features may help us distinguish among the different progressive retirement schemes:
- first, it is important to identify the origin of partial retirement provisions. Measures may be designed and introduced by either law or collective bargaining. In the latter case, there might also be some sort of governmental promotional initiative, though the reason for bargaining on such issues is very likely to be different from the need to assure the financial equilibrium of public pension systems. Rather, it may be linked to the need to reduce costs incurred by companies, to avoid the sudden loss of older and skilled workers, or to promote equal employment opportunities regardless of age. Legislation, on the other hand, though it may be concerned with a wide array of policy objectives, usually shows a strong attention to the sustainability of welfare and pension systems; and
- second, the reference period for the partial retirement can be important. If this 'soft' transition to retirement covers the years before the statutory retirement age, then it is best suited to avoiding full early retirement, with its considerable financial costs and notable loss of often qualified workers who are still relatively young. By contrast, if progressive retirement concerns (also) the period after the normal retirement age, and therefore allows a postponement of the standard exit from the active population, the measures may be considered a specific incentive to support the employment of older people, as well as a means to ease the pressure on pension systems.
In practice, law is the prevalent source of progressive retirement arrangements. This can be easily understood if we consider that progressive retirement has usually an impact on welfare and pension systems and therefore needs to be regulated on a general basis. The role of negotiations among social partners varies considerably in the different countries, but can be significant. Collective bargaining is the main basis of partial retirement arrangements in Belgium, the Netherlands and Norway. Another country where the role of collective bargaining is very important is Germany, though progressive retirement was originally introduced there by law in 1996 - the basic legal provisions have been supplemented by sectoral and company-level agreements which lay down the conditions which are actually applied to progressive retirement in many cases. In Denmark, there is a close link between law and collective bargaining: while progressive retirement schemes have been introduced by legislation, collective agreements often cover policies for older workers in their so-called 'social chapters' (DK9704108N). In Austria, Finland, France, Spain and Sweden, the rules that govern progressive retirement essentially derive from law (and from social dialogue in Austria and Spain) and no collective agreement is required to implement partial retirement schemes.
As far as the other feature of progressive retirement is concerned, ie the reference period, the schemes almost invariably concern the years just before normal retirement and they usually end when the workers reach the statutory retirement age. It is rare that progressive retirement extends beyond the limit of the official retirement age. For this reason, even if the emphasis has changed to some extent in the most recent years, the main apparent objective of progressive retirement measures is to avoid full early retirement and pensions, rather than to support the prolongation of active life beyond the ordinary retirement age. The stress is, on one hand, on easing the exit from work of older workers by reducing the level of effort required on their part (in some cases, there is also the possibility of shifting to reduced hours without any combination of income from work and other sources), and, on the other hand, to soften the burden of early retirement on pension systems and state budgets. Progressive retirement arrangements have indeed often developed within the framework of wider regulations on early retirement.
A major exception to the general rule that progressive retirement usually does not extend beyond the statutory or ordinary retirement age is 'gradual retirement' in France, which is devised for people who continue to work on reduced hours after the statutory retirement age of 60 years. A similar scheme can be found in Spain: the April 2001 tripartite agreement on the improvement and development of the social security system envisages the introduction of a flexible retirement system which should extend beyond the age of 65, by allowing the amount of the pension to be increased if a worker stays in his or her job after the normal retirement age (ES0106244F).
A debate on this issue is under way in Italy, where the focus of the discussion between the social partners and the government is the revision of the 1995 reform of the pension system. There are suggestions that the opportunities to retire with a seniority pension (that is, a pension connected to the number of years worked), rather than an old-age pension, should be restricted and that incentives to continue working after the statutory retirement age should be reinforced. In the UK as well, there has been a debate on the abolition of the statutory retirement age, and more generally on favouring the retention of workers in the active population as long as possible, without strict limitations. In Portugal, a 1999 law introduced a flexibilisation of the retirement age by granting both the possibility of early retirement and incentives for those who continue to work beyond the statutory retirement age and request their pension later.
Low activity rates and restructuring
Progressive retirement has to be seen against the background of low activity rates among older workers - see table 2 below - that have been influenced in the past two decades by reorganisation and restructuring, which have notably affected older workers. There are many reasons which may explain this tendency: from the firms' point of view, a reduction in the number of workers with long service allows them to involve in restructuring processes the workers with the highest salaries and with skills that they may consider as outdated; while for trade unions, early or partial retirement may be seen as a sort of 'reward' for long service and as a way of reducing the social costs of restructuring, since outright redundancies can be avoided or substantially reduced. Such policies may thus be an important tool to keep conflict under control and sustain consensus.
| Country | 1990 | 1996 | 1997 | 1998 | 1999 |
| Sweden | 70.5 | 69.0 | 68.1 | 67.5 | 68.6 |
| Norway | 63.1 | 66.0 | 67.3 | 68.4 | 68.0 |
| Denmark | 57.1 | 50.6 | 54.1 | 53.1 | 56.6 |
| Portugal | 48.1 | 48.5 | 50.0 | 51.7 | 52.4 |
| UK | 53.0 | 51.4 | 51.7 | 51.0 | 52.1 |
| Ireland | 42.2 | 43.2 | 42.6 | 43.8 | 45.7 |
| Germany | 41.6 | 44.2 | 45.2 | 44.8 | 44.7 |
| Finland | 43.8 | 45.1 | 42.0 | 42.0 | 43.9 |
| Spain | 40.0 | 37.3 | 37.8 | 38.8 | 38.7 |
| France | 38.1 | 36.6 | 36.7 | 36.1 | 37.4 |
| Netherlands | 30.9 | 31.2 | 32.7 | 33.8 | 36.3 |
| Austria | - | 30.8 | 30.0 | 29.9 | 30.7 |
| Italy | 32.5 | 28.5 | 28.6 | 29.0 | 28.9 |
| Luxembourg | 28.4 | 22.6 | 24.0 | 25.1 | 26.5 |
| Belgium | 22.2 | 22.8 | 23.1 | 23.8 | 26.2 |
| Greece | 41.5 | 41.9 | 42.1 | 40.4 | - |
| EU average | 41.0 | 40.3 | 40.8 | 40.7 | 41.4 |
Source: OECD Employment Outlook 2000.
Schemes considered
As already mentioned, it is important to point out that out of the 16 countries reviewed here, progressive retirement schemes are present in 10: Austria, Belgium, Denmark, Finland, France, Germany, the Netherlands, Norway, Spain and Sweden. In the study, we focus our attention on the arrangements which reflect the definition stated at the outset: that is, progressive retirement entails both: a reduction in working time; and integration of the part-time pay with either a partial pension or another kind of contribution, be it in the form of unemployment benefit or supplementary pay. In this sense, a mere option to shift to reduced hours granted to older workers, in order to diminish their workload and effort, is not regarded as progressive retirement. For example, a pay agreement for the Luxembourg public sector (LU0007141F) which was enshrined in law in July 2000 introduced the possibility for workers aged 55 and above to apply for part-time work. As there are no provisions for an income supplement, this scheme is not considered in the study. However, if the implementing regulations, still to be issued, provide for some sort of partial pension or other benefit, then Luxembourg should be included in the list of countries which offer progressive retirement opportunities.
In general, it is quite easy to identify which schemes meet our criteria for consideration as progressive retirement (ie reduced working time, plus the combination of part-time pay and another income). A partial exception is progressive retirement in the Netherlands. As will become clearer below, the great heterogeneity of 'pre-pension' arrangements which can be found in the Netherlands mean that there are some 'grey' areas, not least because of lack of information. In fact, since Dutch progressive retirement schemes derive essentially from collective bargaining and are included in broader flexible pre-pension arrangements, it is possible to find: cases where reduced working hours mean proportionally reduced remuneration; cases where the workers face a less then proportionate pay decrease; and yet other cases where they save part of their wage towards their pension. In practice, there is not enough data to discriminate between 'real' progressive retirement and more generic effort-reduction measures for older workers in the Netherlands.
It is difficult to summarise the main features of the various progressive retirement schemes which are available in the 10 relevant countries, since they are very different from one another. In the text below, we try to identify some common elements and the main distinguishing features of each scheme. More information is presented in tables, while specific and detailed descriptions are available in each national report.
A major consequence of the uneven distribution of progressive retirement schemes is that the core of this study covers essentially those 10 countries which provide opportunities for progressive retirement opportunities. However, reference to the other countries is made whenever it is useful to present a complete picture of the overall debate on progressive retirement, and notably in the part devoted to discussion of social partners' and governments' attitudes and positions. In fact, the issue of partial retirement is attracting increasing attention within the broader discussion on pension system reforms and, more recently, in the light of the European Union policies aimed at addressing the consequences of the ageing workforce (EU9909189N).
The role of collective bargaining and law
As mentioned above, the role of collective bargaining in the introduction and the definition of progressive retirement arrangements varies considerably - see table 3 below. However, in only three cases - Finland, France and Sweden - does collective bargaining seem to have played only a marginal part. In these three countries, progressive retirement has essentially been introduced and implemented through legislation. Collective agreements in these countries may include the use of progressive retirement schemes, for example as one of a number of measures to deal with workforce reductions (as in France, for example), but the rules and structure of the schemes have been defined by law.
| Country | Introduction | Implementation rules |
| Austria | Law | Law (SD) |
| Belgium | Collective bargaining | Collective bargaining |
| Denmark | Law | Law and collective bargaining |
| Finland | Law | Law |
| France | Law | Law |
| Germany | Law | Collective bargaining and law |
| The Netherlands | Collective bargaining | Collective bargaining |
| Norway | Collective bargaining | Collective bargaining |
| Spain | Law | Law (SD) |
| Sweden | Law | Law |
SD = social dialogue has dealt with the introduction of progressive retirement.
Source: EIRO.
Negotiations between the social partners have played the greatest role in the Netherlands, Belgium and Norway. In these three countries, progressive retirement was essentially introduced by collective agreements and further specified and implemented through sectoral and decentralised agreements. Indeed, in the Netherlands collective agreements are the sole source of progressive retirement arrangements, which emerged from the autonomous initiative of social partners at sectoral and company level. As a consequence, the ways in which progressive retirement is implemented in the Netherlands are quite heterogeneous and depend on the sector and the company the employees work in. In recent years, collective bargaining over progressive retirement, and more generally on 'pre-pension' and flexible retirement arrangements, has increased (NL9808194F). In 1997, 87% of Dutch collective agreements included 'normal' early retirement arrangements and only 15% covered progressive early retirement. In 1999, 50% of collective agreements transformed early-retirement provisions into more flexible pre-pension schemes (whereby employees determine the age of retirement, but bear the cost of early retirement). In 2000, more agreements providing for flexible retirement/pre-pension were reached (78% of all agreements) - depending on the definition, 30%-50% of agreements included progressive retirement arrangements, with differing pay schemes and individual choices as to the level of pension paid on full retirement at 65.
In Belgium and Norway, the introduction and implementation of progressive retirement has taken place in a more centralised and coordinated way. In Belgium, it was defined by an intersectoral collective agreement, reached in the National Labour Council (Conseil National du Travail/Nationale Arbeidsraad) in July 1993 (agreement no. 55). Since this is a framework agreement, for progressive retirement to be effectively available, further accords had to be reached at sectoral or company level. In 1997 and 1998, 67 sectoral joint committees and subcommittees signed agreements covering partial early retirement on half the normal working hours. In Norway, agreements on progressive retirement have been concluded at both intersectoral and sectoral levels. In Belgium, the bargained provisions were later confirmed by law (a statutory requisite in the Belgian legislative framework), while in Norway progressive retirement can benefit from the state support granted to early retirement arrangements, of which it represents a special type.
In Germany, a 1996 law which introduced the possibility of progressive retirement explicitly empowered the social partners to specify further the ways in which employees may arrange for a smooth shift into retirement. The social partners have widely taken advantage of this possibility and there are a number of collective agreements which cover this topic. Collective agreements have usually been concluded at sectoral level (DE9704108F and DE9710133F), though there are also some important company-level agreements, notably at the German Postal Service (Deutsche Post AG), Deutsche Telekom, Volkswagen and German Railways (Deutsche Bahn). These agreements have introduced various modifications to the legislative progressive retirement provisions. For instance, an important change relates to the minimum net wage, which has usually been increased above the statutory level of 70% of the previous wage.
However, the most notable innovations introduced by bargaining in Germany concern: the introduction, under certain circumstances, of a sort of 'right to progressive retirement' (already envisaged by the law); and the specification of a particular kind of progressive retirement, the so-called 'block model', which was originally introduced in the chemicals sectoral agreement. On the first point, various collective agreements have introduced an obligation on the part of the employer to accept employees' demands for progressive retirement, provided that these remain within the limits of a fixed percentage of the workforce. This possibility was expressly mentioned in the law, which left to trade unions or even works councils the opportunity to negotiate on this matter, setting a threshold of 5% of the workforce. In the relevant collective agreements, this percentage has sometimes been lowered or increased and ranges between 3% and 8%, depending on the sector, the kind of workers (blue-collar, shiftworkers etc) and sometimes the age cohorts to which the employees belong.
The introduction of the 'block model' has transformed considerably the nature of progressive retirement in Germany and in some ways contradicted the original rationale for introducing the scheme. In fact, the 'block model', which has become the first choice for German 'partial pensioners', entails no gradual shift into retirement. The progressive retirement period is split into two equal parts: in the first, the employee works full-time; whereas in the second he or she enjoys full paid (according to the progressive retirement rules) time off.
In Denmark, there is a relatively close connection between law and collective bargaining. The two main progressive retirement schemes (flexible early retirement and the partial pension) were introduced by legislation. Sectoral and company agreements often contain provisions on 'senior policies' (ie policies for older workers), which usually include reduced working hours, together with other provisions such as the possibility to move to other job positions or access to training. An example is provided by the framework agreement which covers state employees, signed by the Ministry of Finance, the Central Federation of State Employees (Centralorganisationernes Fællesudvalg, CFU), and the Danish Confederation of Professional Associations (Akademikernes Centralorganisation, AC). Special schemes are provided for workers aged at least 55, which include the possibility to apply for shorter hours, part-time work and transfers to other job positions.
In this sense, these agreements are similar to those which can be found in the Netherlands and cannot be considered as such as progressive retirement. In general, however, the application of Danish progressive retirement and older workers' schemes is defined through collective agreements. Furthermore, partial pension schemes may be included in the measures laid down by collective agreements and applied in the framework of older workers' policies. For this reason, in Denmark, progressive retirement can be regarded as an element of an active labour market policy initiated by the government and conducted in cooperation with the social partners. Yet, progressive retirement arrangements and schemes for older workers may also be established as a part of staff reduction measures or to rebalance the age composition of the workforce.
In the other two countries which have progressive retirement arrangements (Austria and Spain), the social partners have played a role essentially at national intersectoral level, through social dialogue and concertation. In Spain, there have been two relevant agreements which have referred to progressive retirement: the agreement on the consolidation and rationalisation of the social security system, signed in 1996 between the government and the trade unions - the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO) and the General Workers' Confederation (Unión General de Trabajadores, UGT); and the agreement for the improvement and development of the social security system, reached in April 2001 by the government, CC.OO, the Spanish Confederation of Employers' Organisations (Confederación Española de Organizaciones Empresariales, CEOE) and the Spanish Confederation of Small and Medium-sized Enterprises (Confederación Española de la Pequeña y Mediana Empresa, CEPYME) (ES0106244F). There have been no significant negotiations at lower levels, since the choice to postpone the retirement age is essentially regarded as an individual one. In Austria, the issue of progressive retirement has been taken into consideration extensively within social dialogue, but no specific central agreements have been reached. Despite this history of dialogue, the trade unions strongly criticised the latest reform law in this area (AT0008228F).
Table 4 below sets out the titles, date and nature of introduction, and objectives of the various progressive retirement schemes in the 10 countries concerned (Austria, Belgium, Denmark, France and Spain have more than one main type of scheme) as well as the types of agreement (collective at various levels and/or individual employer-employee) required for the implementation of the schemes.
| Country | Scheme | Introduction | Objectives | Type of implementation agreement |
| Austria | Part-time work for older workers (Altersteilzeit). | 2000, by law (after discussion with social partners). | Allowing reduced working hours for older workers (thereby avoiding early retirement). | Either a collective agreement, or an agreement between management and works council, or between employer and employee. |
| Austria | Partial pension (Gleitpension). | 1993, by a pension reform law. | Providing an alternative to early retirement. | Individual agreement; if employer and employee fail to agree, the works council can be brought into the negotiations. |
| Belgium | Early retirement on half normal working hours. | 1994, by an intersectoral collective agreement (no. 55). | Allowing reduced working hours for older workers. | Sectoral or company-level collective agreements implementing the intersectoral agreement, plus an individual agreement (for workers aged 58, the implementing collective agreement is not mandatory). |
| Belgium | Career break. | 1985, by law; special conditions for over-50s provided by intersectoral agreement in 2000 (no. 77). | Providing older workers with a right to shorter working hours. | In small enterprises (up to 10 workers), employee must obtain employer's agreement. Works council or trade union representatives may negotiate with company in order to regulate some aspects of scheme (requests exceeding 5% of the workforce in small businesses and definition of grounds on which employer may defer worker's right to reduced working hours). |
| Denmark | Flexible early retirement. | 1998, by a legal reform of the 1979 voluntary early retirement (Efterløn) regulation. | Retaining people over 60 in employment. | Collective agreement is needed in public sector, whereas in private sector an individual agreement is sufficient. |
| Denmark | Partial pension. | 1986, by law, most recently amended in 1999 and 2001. | Allowing reduced working hours for older workers. | Individual agreement. |
| Denmark | Working hours reduction and part-time work (as part of older workers policy). | In 1990s, by sectoral agreements to be further specified by decentralised negotiations. | Allowing reduced working hours for older workers. | Sectoral and company-level agreements which define older workers policy. |
| Finland | Progressive retirement. | 1987 in private sector and 1989 in public sector, by law. | Introducing an active labour policy for older workers and reducing pension expenditure. | Individual agreement. |
| France | Progressive early retirement (Préretraite progressive, PRP). | 1982, modified in 1993 and 1997, by law. | Allowing working time reductions for employees approaching retirement and supporting compensatory hiring of people in priority groups targeted by employment policy. Introducing tool to manage reorganisation plans and redundancies. | Individual agreement. Agreement between Ministry of Labour and firm is needed to set company commitments in terms of compensatory hiring and recruitment among priority groups, thereby providing basis for determination of firm's financial contributions. Before signing agreement with Ministry, firm must consult employees' representatives. |
| France | Phased-in retirement (Cessation Progressive d'Activité, CPA) (for public sector employees only). | 1982, by law. | Allowing working time reductions for public sector employees. | Individual agreement. |
| France | Gradual retirement. | 1988 and modified in 1992, by law. | Allowing employees to work beyond statutory retirement age of 60. | Individual agreement. |
| Germany | Progressive retirement. | 1996, by law (which expressly empowers social partners to negotiate further provisions). Possible to enter programme until 2009. | Fighting unemployment and replacing overly expensive provisions for early retirement introduced in 1992. | Unions and works councils may conclude agreements at sector and company level to further specify implementation rules. |
| Netherlands | Progressive retirement (part of flexible pre-pension schemes). | Since 1980s, and increasingly in 1990s, by collective agreements and company policies. | Turning full early retirement into partial retirement. | Collective agreement which sets rules for progressive retirement. |
| Norway | Partial pension. | 1997, by collective agreements modifying 1988 early retirement provisions. | Providing an alternative to early retirement and supporting financial sustainability of pension system. | Individual agreement. |
| Spain | Deferred retirement (still awaiting implementation). | 1997, by law, following social concertation and later specified by intersectoral collective agreement, still awaiting implementation. | Prolonging worker's active life beyond ordinary retirement age. | Not yet available (scheme awaiting implementation). |
| Spain | Early retirement through 'hand-over' contracts (contrato de relevo). | 1984, by law. | Postponing early retirement. | Individual agreement. |
| Sweden | Reduced hours. | 1998, by a pension reform law. | Allowing reduced working hours for older workers. | Individual agreement. |
Source: EIRO.
Main features of progressive retirement schemes
Below we compare the main provisions of the progressive retirement schemes in the 10 countries concerned.
Age
The first eligibility requirement for entering a progressive retirement scheme is reaching a certain age. The eligible workers have to be close to the statutory retirement age: generally, the maximum duration of progressive retirement is around five years (though as long as 6.5 years in Austria, for example). In the case of the career break scheme in Belgium, there is no age requirement, because the opportunity to take partial retirement does not proceed from progressive retirement arrangements as such, but rather from a sort of 'functional equivalent'. A career break can be arranged by all workers and allows them to combine reduced working hours with an income support contribution, provided that an unemployed person is recruited as a replacement. However, even in this case, a recent intersectoral collective agreement has envisaged the introduction of special career break conditions for workers aged over 50 years (BE0101337F).
Career and social security contributions
It is also very common for progressive retirement schemes to set eligibility requirements related to the career of the applicants. The employees must have worked for a certain number of years and notably must have paid social security contributions of at least a given amount or for a certain period. Sometimes, they need to have a certain length of service in the company where they are working when they apply for progressive retirement. For instance, in France employees must be eligible for a full pension in order to have access to gradual retirement, while in Germany they must have paid fewer contributions than those necessary to receive a full pension in order to enter progressive retirement.
Initiative and implementation
Usually the initiative to seek progressive retirement may be taken by both the employer and the employee. Access to early retirement is a personal choice by the employee and is generally implemented through individual agreements between the worker and the employer.
Compensation and incentives
Under the definition of progressive retirement used here, workers involved must benefit from a supplement to the pay they receive for their reduced working hours. This can be either a state contribution, like unemployment benefit, or a partial pension, or both. The role of such 'income integration' is essential in order to make progressive retirement attractive beyond the mere reduction in working hours and effort, and sustainable in economic terms for the partial pensioners.
Furthermore, sometimes there is some sort of economic incentive for the employer, often in the form of reductions in social security contributions. In other cases, as in France, the employer has to pay a fee in order to utilise progressive retirement schemes. Even in France, however, an incentive mechanism applies: the charge that the employer has to pay is linked to the replacement rate of partial pensioners (that is, the amount of working time freed up by partial retirement which is covered by new recruitment). The higher the replacement rate, the lower are the financial contributions the employer has to pay. It is interesting to note that the existence of this fee stresses the similarity between progressive retirement and other tools (such as early retirement), which may be available to employers to manage reorganisation processes, and for whose utilisation employers have to pay a contribution to costs.
Compensatory recruitment
Compensatory recruitment to replace employees taking progressive retirement is seldom mandatory. In France, as already mentioned, there are significant incentives to recruit as replacements young people and persons who belong to priority groups targeted by employment creation policy. Indeed, the financial contribution that employers have to pay for making use of progressive retirement is linked to the level and the composition of new recruitment to compensate for the time freed up by progressive retirement schemes. A similar mechanism operates in Germany, where employers have to make compensatory recruitments in order to benefit from the economic incentives available for the implementation of progressive retirement schemes. An obligation to recruit new employees exists in Belgium, both for early retirement on half working hours and for career breaks - though with some exceptions - and in Spain, for 'hand-over' contracts (ES9711234N). In Austria, a similar requirement was repealed in 2000 (AT0008228F).
The general lack of an obligation to recruit replacement employees seems to suggest that progressive retirement is only marginally conceived as an employment creation policy. Rather, it targets specifically older cohorts and, on one hand, tries to sustain employment of older workers and, on the other, tends to become part of the retirement and pensions system.
Working time reductions
The working time reductions for employees taking progressive retirement vary considerably, depending on the different schemes and the individual agreement between the employer and employee. Often, there is the possibility of a certain degree of flexibility in the definition of the reduced working hours (generally ranging from a 25% to a 75% cut in normal hours). This happens in nearly all countries, while in Belgium (early retirement on half normal working hours) and Germany, the working time cut is fixed at 50%.
Connection with early retirement
In almost all countries there is a strong link between the provisions on early retirement and progressive retirement. Usually, progressive retirement is part of the general rules on early retirement or has emerged as a way to amend early retirement schemes, by making them more 'flexible' and less expensive, as follows:
- in Austria, part-time work for older workers can last up to the early retirement age. Thereafter, employees may effectively opt either for a partial pension or for early retirement (and the majority reportedly chooses the latter);
- in Belgium, early retirement on half normal working hours is an option available within the framework of early retirement arrangements;
- in Spain, hand-over contracts were introduced in 1984 as part of the regulations on early retirement. Furthermore, the April 2001 tripartite agreement for the improvement and the development of the social security system , still awaiting implementation, envisages the introduction of a new form of progressive retirement, which should postpone retirement beyond the ordinary age of 65, and imposes significant restrictions on early retirement possibilities (ES0106244F);
- in France, the main progressive retirement route is the progressive early retirement scheme;
- in Norway and Denmark, progressive retirement represents a modification added to early retirement provisions, in 1997 and 1998 respectively;
- in the Netherlands, progressive retirement is one of the flexible pre-pension provisions which have recently been replacing early retirement arrangements in collective agreements (NL0007199F); and
- in Germany, progressive retirement was meant to reduce the number of early retirements, but in theory and in practice it can serve as a sort of 'pre-early retirement'. In fact, taking the example of the statutory provisions, progressive retirement can start at the age of 55 - then, as the public subsidies may last for a maximum of six years, at 61 the employee may turn to early retirement. Taking into account the possibility of utilising the widespread 'block model', subsequently introduced by many collective agreements, the workers concerned may be practically retired by the age of 58.
An apparent exception is Finland. However, even here progressive retirement is included in the general pension system norms and is an alternative to disability and unemployment pensions (which are special forms of early retirement). In Sweden, progressive retirement is an option available within a new pensions system introduced in 1999: starting from the age of 61 and up to the statutory retirement age, workers may opt either to retire fully, turn to part-time work (receiving a partial pension), or continue to work.
Summary
Table 5 below briefly summarises the main features of the progressive retirement schemes in the 10 countries concerned.
| Country | Scheme and hours reduction | Minimum age | Career requirements | End of the scheme | Income and incentives (besides part-time pay) | Compensatory recruitments |
| Austria | Part-time work for older workers. Full-timers can work up to 28 hours per week and part-timers up to 70% of previous hours. | 55 for men, 50 for women. | Unemploy- ment insurance contributions for at least 15 years in the last 25 years. | Early retirement age (61.5 for men and 56.5 for women). | Worker: at least 50% of the pay reduction. Employer: the Labour Market Service pays 25% of gross pay and covers social contributions exceeding actual working hours. | Repealed in 2000. No longer required. |
| Austria | Partial pension. Hours reduction of 40%-60%. | 61.5 for men, 56.5 for women (new limits to be progressively implemented up to October 2002). | Pension contributions for at least 450 months. | Retirement age (65). | Worker: proportionate 'partial pension'. | None. |
| Belgium | Early retirement on half working hours. Hours reduction of 50%. | 55 | a) Full-time employment in same enterprise for at least 12 months prior to reduction of working hours; b) entitled to unemploy- ment benefits. | Retirement age. | Worker: unemployment benefit and supplementary compensation. | Obligation to replace employee with unemployed worker (some exceptions). |
| Belgium | Career break. Hours reduction of 20% or 50%. | Any, but rules for over-50s to be introduced from January 2002. | For over-50s, 20 years' employment and five years' service with current employer. | For over-50s, the career break will be re-examined every six months. | Worker: career break benefit. | Employer must hire an unemployed worker (some exceptions). |
| Denmark | Flexible early retirement. Variable hours reduction. | 60. | Eligibility for early retirement, ie membership of unemploy- ment fund for 25 years. | Retirement age (65), or early retirement. | Worker: a) proportionate partial early retirement pay; b) a tax-free payment if worker postpones full early retirement. | None. |
| Denmark | Partial pension. Hours reduction of at least seven hours or 25%, part-time hours of 12-30 hours per week. | 60. | Full pension contributions for 10 years during last 20 years. | Retirement age (65). | Worker: partial pension. | None.. |
| Denmark | Working hours reduction and part-time work (as part of older workers policies). Variable hours reduction. | Usually 60, 55 in the public sector. | Varies by sector and firm. | Retirement age (65). | Varies according to collective agreements and usually includes provision of a partial pension. | None. |
| Finland | Progressive retirement. Weekly working time must be reduced to 16-28 hours. | 58 (56 on an experimental basis until 2002). | Private sector: a) full-time employment for 12 months during last 18 months; b) five years of pensionable employment during the last 15 years. Public sector: full-time employment for three years during previous five, of which six months just before starting part-time work. | Retirement age (65). | Worker: a) part-time pension of 50% of difference between full-time and part-time earnings; b) no significant reduction in old-age pension entitlement. | None. |
| France | Progressive early retirement. Average hours reduction of 50%. | 55. | a) Service in firm for at least one year; b) affiliation to a social security scheme for 10 years; c) in full-time work. Workers over 60 must have fewer pension contributions than needed to qualify for full pension. | Retirement age (60). Scheme continues after 60 only if worker cannot qualify for full pension. | Worker: a) benefit of c.30% of previous basic wage; b) social contribution reductions; c) company agreements may grant special bonus. Employer: contribution to financial costs of scheme - contribution level depends on compensatory recruitment. | Employers' financial contribution depends on level of compensatory hiring and proportion of recruits from priority groups: contribution lower for more compensatory recruitment. |
| France | Phased-in retirement (for public sector employees only). Hours reduction of 50%. | 55. | a) Full-time job; b) 25 years' service as state employee. | Retirement age (60). Scheme continues after 60 only if worker cannot qualify for full pension. | Worker: 30% of basic wage. | None. |
| France | Gradual retirement. Variable hours reduction. | 60. | a) Enough pension contributions to qualify for full pension; b) only one part-time activity. | 'Late' retirement after the age of 60 (or return to full-time job or second part-time job). | Worker: partial pension proportionate to % of full-time hours worked.. | None. |
| Germany | Progressive retirement. Hours reduction of 50%. | 55 (possible to enter programme until 2009). | a) Unemploy- ment contributions for 36 months during last five years; b) not entitled to full pension. | Retirement age (65) | Worker: at least 70% of former net full-time income. Employer: if employers hire new workers, they receive payments to compensate the difference between actual working hours (50%) and wage (at least 70%) and 90% of full-time worker's pension contributions; incentives may last up to six years. | Needed in order for employers to benefit from economic incentives. |
| Nether- lands | Progressive retirement (part of pre-pension schemes). Variable hours reduction. | 60. | Varies according to collective agreements | Retirement age (65). | Varies according to collective agreements. | None. |
| Norway | Partial pension. Variable hours reduction. | 62. | a) Employed in company for three years, or covered by agreement on early retirement for five years; b) 10 years of pension contributions since age of 50. | Retirement age (67). | Worker: partial pension. | None. |
| Spain | Deferred retirement (still awaiting implement- ation). Variable hours reduction. | 61. | 35 years' pension contributions in order to benefit from incentives. | 'Late' retirement after age of 65. | Worker: a) a higher pension on retirement; b) reduction of social contributions. Employer: social contribution reductions. | None. |
| Spain | Early retirement through hand-over contracts. Hours reduction of 50%. | 60. | Eligibility for early retirement, ie 30 years of pension contributions. | Retirement age (65). | Worker: partial pension proportionate to working hours reduction. | Obligation to recruit replacement. |
| Sweden | Reduced hours. Hours reduction of 25%, 50% or 75%. | 61 | Eligibility for a pension. | Retirement age (67). | Worker: partial pension. | None. |
Source: EIRO.
Take-up of progressive retirement
In some countries, progressive retirement schemes are used to only a limited extent. The main reason for this under-utilisation is apparently the fact that when workers are eligible for both progressive retirement and retirement, they tend to opt for the second possibility. This situation is reported from Austria - notably as far as the partial pension scheme is concerned - France and Belgium. In Belgium, another important factor is 'competition' with the career break scheme, which is perceived as being easier to access: at the end of 1998, only 706 people had opted for early retirement on half-time hours, while more than 24,000 workers over the age of 50 years were on a career break (almost a third of all employees on a career break).
A similar case is France, where the progressive early retirement scheme gained momentum between 1993 and 1995. However, the number of people choosing it has steadily decreased ever since. In 2000, some 11,500 workers opted for progressive early retirement. Since there are no strong financial incentives for preferring partial retirement to full early retirement, many workers may decide to leave their job rather than moving to part-time work. As for as the gradual retirement scheme, which extends the worker's activity beyond the statutory retirement age of 60, in 1998 only 260 people opted for it. However, it is interesting to note that some French firms have become regular users of progressive early retirement and utilise it as an effective tool to manage the age composition of the workforce, as well as to meet demands from employees and trade unions. In Spain, hand-over contracts (which require compensatory recruitment) have since 1990 led to less than 0.05% of all recruitment.
A further element to be taken into consideration is the effect of progressive retirement on future pension entitlements when the worker retires fully. For example, in Sweden specific provisions on a partial pension (delpension) scheme were repealed by a 1998 pension reform and no new applications have been allowed since December 2000. Now, within the new pensions system, it is still possible for employees aged at least 61 years to ask their employer for reduced working time. If this is agreed, the workers concerned may combine part-time work with a partial pension. However, the amount of their final pension will be reduced, since the lower earnings during the period of progressive retirement will be included in the calculation. Therefore, the income-based calculation method for pensions may discourage both early and progressive retirement. In 2000, there were 13,000 partial pensioners in Sweden under the old system.
In other countries, the experience has been more successful. In Germany, since progressive retirement was introduced in 1996, the total number of applications has increased sharply from fewer than 10,000 in the first two years to nearly 40,000 in 2000. Research shows that the take-up of progressive retirement is strongly linked to establishment size. For instance, in the private sector, progressive retirement is utilised in 9% of establishments with under 50 employees and in 85% of plants with over 1,000 employees (and 61% in the 500-1,000 employee class). As progressive retirement is significantly linked to workforce reductions, some researchers suggest that it might be used to accommodate for redundancies rather than being a tool of active human resource management.
In Finland, an experimental reduction in 1998 of the access age for progressive retirement from 58 to 56 has led to an increase in the number of part-time pensioners. In January 2001, the number of employees taking partial retirement was 26,000, compared with 7,000 in 1997. In Norway, progressive retirement has become increasingly popular in the state sector and notably in the educational system: in 1999, almost 60% of people leaving work at 62 chose the partial pension route. However, as at December 2000, only 20%-25% of workers on early retirement had a partial pension (combining a pension with either work, disability benefits or sickness benefits).
Position of governments and social partners
Governments generally favour the introduction of forms of flexible retirement and, among other measures, of progressive retirement schemes. The main reasons behind this attitude are that:
- at least since the early 1990s, and to an increasing degree, the issue of pension system sustainability has figured prominently on the reform agenda of European governments; and
- more recently, the problem of low activity rates among older people has emerged, as well as some worries about possible future labour shortages, partly already evident - as in the case of the information and communications technology sector throughout Europe, or police officers, school teachers and nurses in the UK.
As a consequence, if older employees remain longer at work, this could help redress the balance of national pension system budgets (more contributions will accrue to the funds and fewer pensions will be paid out) and fill the labour supply gap. In recent times, the emphasis has shifted somewhat towards the support of the employability of older people, also in connection with the European Union initiatives to address the ageing workforce issue.
The position of the Dutch government on flexible retirement is interesting in this respect. It maintains that there is a need for a structural rise in the activity rates of older employees and for the reduction of early retirement costs, and it is trying to provide the social partners with various tools to reach such a goal (such as tax relief linked to training for older workers). However, the emerging policy option seems to be to support full employment until the statutory retirement age, rather than a gradual move into retirement. In fact, the government seems to be worried that a general regulation of progressive retirement, perhaps providing incentives, might lead to an increase in demand, thereby involving the same negative effects as the previous early retirement schemes (which are generally being replaced by more flexible pre-pension arrangements).
Among the countries where progressive retirement arrangements are not present, the Irish government has recently raised the issue of flexible retirement. Increasing concerns about labour shortages have led the government to move away from its past encouragement of early retirement, which was seen as a source of employment creation. The issue of flexible retirement was discussed at the annual conference of the Retirement Planning Council in October 2000: the government suggested that continued working by older people should be promoted by introducing incentives and proper training schemes.
In Italy, law 196 of 1997 (the so-called 'Pacchetto Treu') envisaged the introduction of incentives for supporting a move to part-time work by employees within three years of retirement, provided that young unemployed people were recruited to cover the working hours freed up. A similar provision was included in a 1999 law which empowers the government to reform the system of job-creation incentives and 'social shock-absorbers' to ease the effects of redundancies (IT9904245F). However, neither of these two measures has been implemented so far.
Denmark and the UK provide interesting examples of governmental campaigns designed to induce the social partners, and notably employers, to consider the benefits of a proactive policy which would help keep older workers in employment as long as possible. In Denmark, the government has started a series of initiatives to support activity rates and prevent social exclusion among older cohorts. These initiatives aim at fostering the diffusion of 'senior policies', by stressing the potential role of older workers in the transmission of skills to younger employees. In the UK, besides the concerns about social exclusion and the impact on the financial equilibrium of pension schemes, the government has stressed the possible negative effects on GDP growth of the low activity rates among older people. The British government has identified 'downshifting' (ie working less) as a proper policy to reduce the workload and effort of older workers, as they approach retirement, so that they may remain within the workforce. Moreover, in February 2000, the Department of Education and Employment launched a national media campaign to highlight the benefits of an 'age diverse workforce' and to promote the adoption of a code of practice on age diversity in employment (UK0003159N).
Trade unions support measures that can help retain workers in employment, including flexible retirement arrangements, but usually stress that the choice not to retire or to retire partially must be a wholly voluntary one. They thus promote and welcome any initiatives that aim to prevent age discrimination at the workplace and, at the same time, they are against the introduction of constraints regarding access to early retirement. They believe, in fact, that the right to an early retirement has often been acquired by workers thanks to long service. In some cases, as for the German metalworkers' union IG Metall (DE9910217F), the unions believe that early retirement may represent a significant opportunity for younger workers to find a job.
However, the potential drawbacks of early retirement are also recognised. For instance, the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) considers that early retirement may have negative consequences because of the loss of social networks and contacts for the workers involved, the erosion of know-how and experience at the workplace, and the growth of the non-productive part of the population. Also in Portugal, unions have started to consider early retirement critically, since it seemingly favours the spread of precarious jobs (the young new recruits have often fixed-term contracts) and it involves high costs for the citizens at large, who bear the burden of company restructuring, instead of the employers.
Employers are usually in favour of more flexible retirement arrangements and of the prolongation of active life. They share the goals of making the pension system less expensive and more sustainable, as well as of supporting the employment and employability of older workers. They believe that labour shortages can be very harmful to the economy since they may lead, among other consequences, to wage increases that might negatively affect the competitiveness of European firms. In UK, a group of employers who belong to the Employers Forum on Age strongly advocate the introduction of flexible retirement as a means to deal effectively with employees' withdrawal from the workplace. In their opinion, this would allow for talented people to be retained and for capacity and skills within organisations to be better managed, avoiding the sudden loss of workers' knowledge, contacts and experience when they retire and restoring a better balance between home and work for older workers.
In general, employers support the introduction of measures that make it more attractive for older workers to remain in the workforce, for instance through tax relief or other economic incentives, and stress the importance of training, in order to keep workers' skills updated. From the employers' point of view, progressive retirement and part-time work for older employees may be important instruments to sustain the activity rates of people who might already have the possibility to retire. However, employers' associations sometimes emphasise the need not to introduce further constraints over firms' policies as regards the employment of workers of a certain age and the definition of schemes for older workers. For example, in Austria, the Chamber of the Economy (Wirtschaftskammer Österreichs, WKÖ) employers' association is against restrictions, on grounds of their age, on the possibility of dismissing workers and it opposed obligatory compensatory recruitment for employees taking progressive retirement, until this requirement was eventually repealed.
Commentary
Progressive retirement arrangements, to date, appear to be closely linked to early retirement. In many cases, they were devised to reduce or offset the negative effects of anticipated retirement - ie high financial costs and a fall in activity rates of older workers. Governments were often the first to realise the drawbacks of early retirement, mainly because of its excessive burden on the state budget, and they are usually the actors most in favour of a flexibilisation of retirement schemes. However, as the social costs of early retirement have become more apparent - in terms of the social exclusion of older workers, loss of know-how and experience for firms, and tightening of the labour market (especially for certain occupations and skills) - and as the financial costs put increasing constraints on state budgets, the social partners have become more and more concerned with managing the transition from work to retirement.
In recent years, the emphasis put by the European Union on policies devised to sustain the employability and the retention of older workers within the workforce has given a major impetus to the revision of measures regarding flexible retirement, with a view to effectively supporting the activity rates of older workers. In this sense, the provisions included in the EU Employment Guidelines which coordinate Member States' National Action Plans for employment, and the EU policies to address the issues raised by an ageing workforce, have probably strongly supported a change in the prevailing attitudes of governments and social partners to flexible and progressive retirement. Yet, the shift from the focus on 'reducing the harm' of too early retirement to the full recognition of the value of the employment of older workers seems to be uncompleted.
The attitudes of employees, trade unions and employers are crucial for the completion of this transformation. In the past, older workers often accounted for the largest share of redundancies in cases of restructuring. The use of early retirement arrangements made this choice relatively acceptable. The employers were able to reduce the part of the workforce which was on average the most expensive (because of seniority) and often regarded as difficult to adapt and endowed with outdated skills. The employees in many cases welcomed early retirement as a well-deserved reward for long service. The unions, by these means, could reduce actual dismissals and maintain consensus even during far-reaching reorganisation processes. Now, the debate on flexible and progressive retirement challenges in many respects this sort of 'balanced solution', while the actors may still hold some of the positions that led to a widespread use of early retirement.
First, the employees are not at all ready to abandon the option to retire early, if this is available. In fact, it is stressed from a number of countries how keen workers are on taking on both progressive retirement and early retirement, preferring the latter when they can choose it (not least because they may perceive workloads and work intensity as excessive). Yet, it is widely suggested that workers are quite 'rational' in their choices in this domain and are very sensitive to the economic attractiveness of the different schemes in terms of the effects on present income and future pension entitlements. Therefore, the creation of a suitable incentive structure to support flexible and progressive retirement, compared with early or full retirement, seems to be crucial.
Second, any changes in retirement schemes and pension systems call into question the action of trade unions. Even if they share the concerns about the ageing workforce, they cannot ignore the persistent employees' demand for retirement opportunities as early as possible. This explains the difficulty of negotiations on pension system reforms and the unions' strong support for both active labour market policies for older workers and the confirmation of early retirement arrangements, though in some ways revised and restricted. In the unions' opinion, the choices concerning access to, or postponement of, retirement must be and remain fully voluntary.
Finally, the employers' associations appear to be particularly worried about labour and skill shortages, as well as the costs of general pension systems. Therefore, they are in favour of measures and incentives that can sustain the activity rates of older workers and their access to training. However, individual employers seem to prefer to keep a broad room for manoeuvre in the field of older workers policies, in order to be able to retain 'core' and qualified workers and, at the same time, avoid further constraints on their possible reorganisation choices, based on age. This brings us to the crucial importance for our wider topic - the transition from work to retirement - of firms' policies on older workers, which has been recognised by important governmental campaigns explicitly aimed at changing the attitudes of employers toward the employment of older workers. For example, the regular use of early progressive retirement by some French companies suggests the possibility of an effective integration of partial retirement into firms' policies.
A clear example of how difficult it is to break the interests behind the 'early retirement solution' is given by the German 'block model' of progressive retirement. In this case, collective bargaining over progressive retirement has contradicted the legislator's original intention to limit the use of early retirement, by providing a 'functional equivalent' to full early retirement through the total leave granted to the 'partial' pensioner in the second half of their period of partial retirement. This innovation has probably largely limited the expected positive effects of progressive retirement on the actual presence in employment of older cohorts (though workers in progressive retirement may be officially counted as part of the active population), on the social exclusion of older people, and on skill levels and know-how transfer within firms.
In conclusion, it is possible to say that the importance and diffusion of progressive retirement arrangements are probably bound to increase in the future. However, if progressive retirement is to become a full proactive measure to support the employment of older workers, instead of a passive initiative to keep under control pension expenses, a number of changes will be required. First and foremost, the completion of the changes in the attitudes of all the parties involved (workers, trade unions, employers and governments) will be crucial, so that they will be ready to share the costs of finding new solutions, in terms of financial contributions and restrictions on the range of available choices (such as the amount of old-age pensions, the rules of early retirement or the commitment to older workers policies). In the end, progressive retirement may well be an element of a new approach to 'lifetime organisation', with a different balance between work, learning, family and leisure time, but this would require broader transformations in pension systems, training and educational systems and work organisation at the workplace. (Roberto Pedersini, Fondazione Regionale Pietro Seveso)