Transcript Promoting Adequate and Sustainable Pensions in the EU: The

Promoting Adequate and Sustainable
Pensions through the Open Method
of Coordination
Presentation by the European
Commission
Tallinn, 12 November 2003
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Promoting Adequate and Sustainable Pensions in the EU:
The Open Method of Coordination
The Lisbon Strategic Goal:
The EU as the Most Competitive and
Dynamic Knowledge-Based Economy
• March 2000: Lisbon European Council calls for an
economy “capable of
– sustainable economic growth
– with more and better jobs
– and greater social cohesion.“
• Depends on successful economic, employment and
social policies in the Member States
• Policy coordination at EU level through Broad
Economic Policy Guidelines, Employment Guidelines
and the new ‘Open Method of Coordination’
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Promoting Adequate and Sustainable Pensions in the EU:
The Open Method of Coordination
The Open Method of Coordination
• Step 1: EU defines common objectives (December
2001, Laeken European Council)
• Step 2: Member States submit national strategy
reports (September 2002)
• Step 3: Commission analyses national strategies and
drafts joint report (December 2002)
• Step 4: Council approves finalised joint report (March
2003)
• In parallel: Development of commonly agreed
indicators
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Promoting Adequate and Sustainable Pensions in the EU:
The Open Method of Coordination
The Open Method of Coordination:
An Integrated Approach
• Because adequacy depends on financial
sustainability ...
• and reforms for financial sustainability will only be
accepted and lasting if adequacy is secured.
• Future of pension systems does not depend on
pension system design alone
• Pension reform, employment policy and public
finances must be mutually reinforcing: Streamlined
policy coordination at EU level
• Avoid intergenerational conflict and ideological
debates such as pay-as-you-go vs. funding
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Promoting Adequate and Sustainable Pensions in the EU:
The Open Method of Coordination
Common objectives on
pensions
Adequacy
(meeting the social objectives)
Financial Sustainability
(making sure that we can afford it)
Modernisation
(adapting to changing needs)
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Promoting Adequate and Sustainable Pensions in the EU:
The Open Method of Coordination
Common objectives (I)
Adequate
Pensions
• Ensure a decent living standard so as to
prevent poverty and social exclusion in
old age; allow the elderly to share in the
economic well-being of their country and
to participate in public, social and
cultural life
• Provide access to appropriate pension
arrangements necessary to maintain
one’s living standard
• Promote solidarity between and within
generations
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Promoting Adequate and Sustainable Pensions in the EU:
The Open Method of Coordination
Common objectives (II)
Financial Sustainability
Employment
• Achieve a high level of employment
• Offer effective incentives for labour
market participation of older
workers
Sound
Public
Finances
• Ensure sustainability of public
finances
Pension
Systems
• Strike a fair balance between the
active and the retired
• Ensure the financial sustainability of
private pension schemes
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Promoting Adequate and Sustainable Pensions in the EU:
The Open Method of Coordination
Common objectives (III)
Modernisation
of pension
systems
• Ensure compatibility with
labour market flexibility and
mobility
• Abolish sex discrimination
• Increase transparency and
predictability of pension
systems and their capacity to
adapt to changing
circumstances
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Promoting Adequate and Sustainable Pensions in the EU:
The Open Method of Coordination
Next Steps: From Now on With the
Acceding Countries
• Special studies requested by European Council
– incentives to work longer
– current and prospective replacement ratios
– later: regulation of private pension schemes; definedcontributions vs. defined-benefits; gender impact of pension
systems
• New expenditure projections for mid-2005
• National Strategy Reports by mid-2005
• New joint report for 2006
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Promoting Adequate and Sustainable Pensions in the EU:
The Open Method of Coordination
Further information
All information about the European Union:
http://europa.eu.int
The Joint Pension Report and the National
Strategy Reports:
http://europa.eu.int/comm/employment_social/socprot/pensions/index_en.htm
Reports by the Economic Policy Committee on
the budgetary implications of ageing:
http://europa.eu.int/comm/economy_finance/epc/epc_ageing_en.htm
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