The news here is that those relying on a pension will have to work a little longer. MMM anyone guess where I saw this before?
EUROPE – The European Commission has reiterated its desire to reinforce second and third-pillar pensions and said it will support EU member states' efforts to raise legal retirement ages.
According to a leaked draft of the White Paper on pensions, the Commission also aims to develop a "code of good practice" for European occupational schemes, addressing issues of employee coverage as well as measures of risk-sharing.
The draft, circulated by the Commission last week, said: "[The White Paper] aims to gear EU policy instruments towards offering better support to pension reform efforts in the member states and proposes a set of mutually reinforcing initiatives, ranging from legislation over financial incentives to policy coordination and monitoring progress towards shared objectives within the integrated and comprehensive Europe 2020 framework."
The Commission also reiterated its intention to offer financial support to member states and social partners wishing to share information with other countries or international organisations on the implementation of pension reforms and new retirement policies.
This would occur through the Commission's PROGRESS programme and the future Programme for Social Change and Innovation – which both facilitate mutual learning and policy development.
In a previous leaked draft version seen by IPE in November last year, the Commission already said it would encourage member states to implement wide-ranging pension reforms by providing financial support for any initiatives.
In the new draft version, the Commission goes even further. The Brussels-based institution lists a range of measures it hopes to implement, while stressing that the EU has no powers to legislate on the design of pension systems in the member states.
Among the measures proposed, the Commission said it would ask the Social Protection Committee (SPC) and the Advisory Committee on equal opportunities between women and men to identify and recommend best practice in reducing the gender gap in pensions – including promotion of equal pay, minimum pension entitlements, care credits and pension rights splitting at divorce.
One person acquainted with the drafting of the White Paper pointed out: "If a country allows women to retire at age 60 and men to retire at age 65, the state adds at least 20% to its public pension bill."
The Commission said it aimed to promote joint work by the SPC and the Employment Committee (EMCO) on gender-specific obstacles.
It will also call on social partners to develop ways of adapting workplace and labour market practices.
"This will include career management – notably regarding strenuous jobs – so as to facilitate longer working lives for women and men," it said, adding that the European Foundation for the Improvement of Living and Working Conditions and the European Agency for Safety and Health at Work would provide "expert advice" at EU level.
Building on its proposal for the European Social Fund (ESF) in the 2014-20 programming period, the Commission said it would also encourage member states to make use of the ESF to support active and healthy ageing, including the reconciliation of work and family life.
It said it would monitor whether programmes backed by the fund effectively supported the reform needs identified in this area by the White Paper under the Country Specific Recommendations heading.
As part of its plan to develop complementary private retirement savings, the Commission is seeking to invite the SPC to review good practice with regard to individual pension statements.
According to the Commission, this would encourage member states to provide better information to individuals for their retirement planning and decisions on how much to save through supplementary pension schemes.
Regarding the second pillar, the Commission repeated its intention to develop a code of good practice for occupational pension schemes, addressing issues such as the payout phase, risk-sharing and mitigation, cost-effectiveness, shock absorption and ways of avoiding pro-cyclicality in investments.
With respect to cross-border activity, the Commission said it would promote the development of pension-tracking services, allowing people to keep track of entitlements acquired in different jobs.
The draft said: "[The Commission] will consider, in the context of the revision of the IORP directive and the proposal for a portability directive, how the provision of the required information for pensions tracking can be ensured, and it will support a pilot project on cross-border tracking."
One of the main issues for the development of cross-border pension vehicles, according to the Commission and pension providers, remains tax obstacles to cross-border mobility and cross-border investments.
The Commission said it aimed to investigate tax rules and would initiate – where necessary – infringement procedures.
The person familiar with the matter, however, insisted that, even though the IORP directive was mentioned in the report, the White Paper was not about taking the elements of the IORP review, as this specific regulation already had its own agenda.
The source explained that the delay in the White Paper publication had mainly been due to the changes brought up by the member states since the Green Paper consultation.
He said: "The publication of the White Paper had to be delayed in order to fully take on board all the new instruments and then suggest European level measures to support member states to implementing these country-specific recommendations."
The Commission is expected to publish the final version of the White Paper some time this week.