Communiqué, issue 4, 2004
Articles
- Towards the Lisbon objectives: The new four-year programme
- Occupational pension systems in Europe
- Quality of life in Germany and Poland
- Focusing on Europe’s working poor
- ERM records high levels of job losses
- Living to work, working to live
- Life satisfaction varies but Europeans are generally optimistic about the future
- Challenging times ahead
Previous issues of Communiqué
Traditional state pension systems are likely to remain the primary source of income for retired people in the future but Europe’s social partners are pushing for better occupational and individual pension arrangements in the light of future demographic trends, according to the latest comparative study from the Foundation’s European Industrial Relations Observatory (EIRO).
Almost all European countries have recently reformed or started to reform their pension systems with a view to ensuring the adequacy and sustainability of pensions in the future. Recent demographic developments, such as falling birth rates, an overall longer life expectancy and the ageing of the ‘baby boom’ generation, has put increasing pressure on the sustainability of current pension systems. Occupational pensions and industrial relations, the new EIRO comparative study, examines the industrial relations aspects of recent pensions developments in 18 countries. The report focuses mainly on occupational pensions, an area where the social partners often play a significant or even dominant role.
Individualisation of pensions
The report shows that Europe’s social partners recognise that traditional state pension systems will in the future carry the bulk of pension obligations. However, there is a clear trend among social partners to press for better supplementary state or occupational pension and more individual arrangements: defined-benefit systems are likely to be replaced by schemes based on defined contributions. Such arrangements essentially shift the risk away from the employer to the employee with regards to pensions and reflect a trend towards the individualisation of pension arrangements.
The report also confirms that in many countries there has been a reversal of the trend of lowering the general retirement age and many early retirement schemes are being abolished or at least tightened up across Europe.
Differences in type of coverage
The trend toward the individualisation of pension arrangements could have adverse effects on certain categories of workers. The report shows that there are large differences in pension coverage among different groups of worker. Women, part-timers and unskilled workers are underrepresented in most occupational pension schemes, not to mention the self-employed and workers in various other types of non-standard employment. Although several countries have taken measures to facilitate the participation of these groups in the system, entry to the basic occupational system will not be made easier when these schemes become more individualistic in character, according to the report.