Adequate, sustainable and safe European pension systems (debate) 
President
The next item is the report by Mrs Oomen-Ruijten, on behalf of the Committee on Employment and Social Affairs, on 'Towards adequate, sustainable and safe European pension systems'.
Ria Oomen-Ruijten
rapporteur. - (NL) Madam President, allow me to start this debate by thanking my colleagues for their extremely pleasant and fruitful cooperation. I would also like to extend those thanks to the advisors of the parliamentary secretariats and, of course, our own staff.
It was not easy to manage such a large number of amendments. I still think that we have been successful, however, because we have now come up with something concrete in response to the Green Paper. A secure, sustainable and adequate pension, which is the guarantee that European citizens want. It is not as simple as that, however, as pensions are, and will remain, the responsibility of Member States.
However, that does not mean that we are not allowed to express our opinions or table any proposals through the open coordination method, which may entail revision.
The sustainability of pension systems is under threat, with an inverted population pyramid being the trend: we now have more older people, senior citizens are living longer and therefore, fewer people are left to finance the pensions. The pay-as-you-go systems of the first pillar are the perfect expression of the solidarity between the generations, and they will continue to remain the most important in the future, too.
However, on top of the burden on the younger generation, there is undeniably also a pressure on collective budgets and that, in turn, is having repercussions on the Stability Pact, whether we like it or not.
Member States are raising their retirement ages. I am rejecting the proposals for European indexation of pensions to increased life expectancy. I am doing that because of significant variations in life expectancy between Member States and because, even if we could index the two, this would not be socially responsible, in my opinion.
What we have found, though, is that we must all move towards a higher retirement age, and that process must take place at Member State level, in conjunction with our social partners.
There is also another side to this coin - and I see, Elisabeth, that I have your attention - and that is that we must ensure that older people remain in work. That, therefore, means that we should focus more efforts on flexible career schemes and flexible retirement schemes and that we must improve and adapt conditions, if older people are to be able to continue working.
The Member States that have based their pension systems on the second pillar have been saving, often through joint employer-employee schemes, and, in some cases, in the new Member States, through mixed schemes. The funds have been put into savings funds, pension funds or they appear on companies' balance sheets. The saving and accrual systems are under less pressure than public finances, but there too, increased life expectancy is posing a problem.
On top of that has come the financial crisis, poor results on bond and equity markets and the low interest rates that are putting guarantees on expected pensions under pressure.
The answer which is being prepared by the Commission is as follows: the application of more stringent solvency requirements is - and I will say it here once again - not the right answer. Good supervision: yes! What we need first, though, before adopting any laws, is an in-depth impact assessment of the effects of solvency.
In this connection, I also wish to point to the debate on derivatives. You cannot link derivatives and pension funds, just like that. In a pension fund, derivatives are used to hedge risks. Hence, not for speculation. So even there, Commission, you must look before you leap.
Turning now to the third pillar. It seems to me that we should not harbour unrealistic expectations. You can only use individual saving opportunities if you also have the money. However, what we do want to do is create greater awareness, and you get greater awareness when people are informed about their pensions, so we also need a tracking system.
Madam President, the European internal market is absent from the third pillar, so we have to do something about that, too.
Finally, I would like to make two concluding comments. On adequacy: we cannot achieve that at European level, Member States must do that. On transferability: in my opinion, an open labour market can only function with more free commuter traffic which does not put employees who exercise that right at a disadvantage. Though there, too, we need transferability: yes, but with an adaptation period, so we need new contracts and then an impact study.
László Andor
Member of the Commission. - Madam President, the Green Paper on pensions which we published last summer started a much needed debate on the future of pensions in Europe. It resulted in more than 100 meetings and conferences with stakeholders and we received almost 1 700 responses.
The Green Paper outlines the key challenges facing the Union in this area, and asked fourteen questions about how work at EU level could help the Member States in ensuring that pensions are adequate, sustainable and safe, while fully respecting the principle of subsidiarity. The Green Paper takes a holistic approach, because my fellow Commissioners, Rehn and Barnier, and I are convinced that adequate, sustainable and safe pensions call for coordinated, joined-up policies spanning our three areas of responsibility.
Let me briefly restate the Commission's reasoning for publishing the Green Paper last year. First, we need to overcome the imbalances resulting from the increasing divergence between life expectancy and retirement ages. Second, we need to adjust the European framework to reflect the changes that have come about in national pension systems after a decade of pension reforms. Third, we must draw lessons from the financial and economic crisis. The crisis has highlighted the need to review financial market exposure and the design of our pension systems in order to improve risk mitigation and enhance the funded pension's capacity for shock absorption. Fourth, we need to fully prepare our pension systems for the acceleration of population ageing.
The Member States have already engaged in long-standing cooperation to learn from each other's experiences and exchange good practice in pension reform. There is a consensus on the need for coordination at EU level and for establishing EU rules on cross-border issues. For the last 10 years, coordination at EU level has underpinned Member States' efforts to modernise the pension systems, and many Member States have already made good progress in adapting the pension systems to reflect demographic ageing, changes in the labour markets and evolving gender roles. However, most Member States have a long way to go and a few others have not even begun with pension reforms.
I was pleased to read the report, on which I congratulate the rapporteur, which is highly supportive of the holistic approach we have chosen. In several places, it highlights the links between adequacy, sustainability and safety. It also clearly identifies policy areas where the EU can add value. The Commission is currently in the final stages of analysing the results of the consultation, including the final opinion of the European Parliament. Given the urgency of the situation, the Commission has already started the preparations for the White Paper to be presented in the third quarter of 2011.
Let me conclude by saying that one of the great successes of Europe's social model is to ensure that old age is not synonymous with poverty. This is a promise on which we have to continue to deliver and help Member States to take the right decisions to ensure that pension systems are fit for purpose. The last 12 months have seen a lively debate in the field of pension reforms and this year promises to be equally intense. I very much count on Parliament's support to bring about a real change to create both adequate and sustainable pensions for the future.
George Sabin Cutaş
Madam President, the fact that we are discussing pensions today in the European Parliament plenary will confirm how important they are to Europe. An ageing population, the impact of the economic and financial crisis and the late entry of young people into the labour market require common solutions. However, pensions remain a national responsibility and the purpose of the subsidiarity principle is to establish the limits of European intervention. Nevertheless, if Member States implement existing EU-level legislation better, we will benefit from a single market which operates more efficiently, thereby encouraging greater worker mobility.
In addition, so that public pension systems are sustainable, we must ensure that people have the opportunity to continue working up until retirement age. The rise in unemployment among Member States is a matter for concern, jeopardising the principle of intergenerational solidarity. Indeed, steps to reform the pension system must go hand in hand with promoting employment policies. Similarly, pension reform must not be synonymous with depriving groups which are already vulnerable of a safe, decent income. States must not shirk their obligation to provide adequate pensions for all citizens.
To avoid such exploitation at national level, we have put forward the idea of defining an adequate pension at European Union level. It is my view that it is not enough to ask Member States to guarantee a level of pensions from the first pillar above the poverty threshold. I certainly understand the argument about the diversity of national conditions and the reluctance of states to allow the European Union to be involved in a matter at the very core of national sovereignty. However, I think that EU bodies must show greater concern for European citizens' living conditions. Social discontent can trigger unexpected effects. Two recent examples, outside the European Union, illustrate the level of tolerance of a population which has constantly been forced to make sacrifices in the interests of national governments which pay too little attention to their citizens' needs.
Cornelis de Jong
rapporteur for the opinion of the Committee on the Internal Market and Consumer Protection. - (NL) Madam President, first of all, I would like to extend my sincere thanks to my fellow Member, Mrs Ria Oomen-Ruijten, for the good cooperation on her part. I am grateful to her for reproducing much of the opinion, if not, in fact, the entire opinion that I wrote for the Committee on the Internal Market and Consumer Protection (IMCO).
In particular, I am pleased with the recommendation that a European system be developed which will make it possible for everybody to know how much pension they have built up, regardless of which Member State(s) it was accrued in.
Nevertheless, I do still have some questions, especially about the discrepancy between Mrs Oomen-Ruijten's statement just now and the recommendation that pension policy come under the aegis of European economic governance. We do not know exactly what kind of form that will take, but there is a real chance that it will not be optional. I do not want to give the impression, by voting in favour, that I, for example, will be contributing to the transfer of national powers on this issue to the EU.
In addition, I am concerned about the recommendation, which is, indeed, in there, that the retirement age should be raised in the light of life expectancy. I believe that that is definitely not necessary for the Netherlands, and that is why I cannot endorse the recommendation. I would like the rapporteur to comment on this.
Barbara Matera
Madam President, ladies and gentlemen, I, too, would like to thank Mrs Oomen-Ruijten.
The lack of any significant attention to gender issues in the Commission Green Paper on the future of pension systems in Europe gives cause for concern: women are discriminated against in pension calculations because they interrupt their careers more often in order to look after their children, sick relatives and the elderly. To fulfil their family commitments, women are therefore more liable than men to have to accept precarious or part-time work, resulting in an average gender pay gap of 18% in the European Union.
That leads to evident discrimination against women, who receive pensions that are clearly lower than men's. This increases the risk of poverty for older women, especially when the fact that they tend to live longer than men is taken into account. The time women devote to caring for their children or other dependent family members needs to be recognised in the calculation systems as being equivalent to all other kinds of contract when pensions are calculated. The Green Paper offered a consultation ...
To conclude, I hope the new White Paper will devote greater attention to the sensitive and worrying issue of the gender gap in the calculation of pension rights in the EU.
Csaba Őry
Madam President, first of all, the large number of motions for amendment - there have been nearly 500 of them - is a good indication of the tremendous interest surrounding this topic, and the rapporteur, Ria Oomen-Ruijten deserves nothing but our thanks for turning this immense haystack of motions for amendment into a report which reflects the current opinion of Parliament. I am saying its current opinion, since we are standing at the beginning of the debate, and this is about the Green Paper, which will be followed by a White Paper, and then by additional reports, meaning that we are obviously in a stage of a larger process.
In general, I must say that I agree with the Commission's approach, which welcomes diversification, that is, pension systems resting on multiple pillars, but, at the same time, I would like to point out that the wording could be a little more precise here. Obviously, when we are speaking of second pillars, we mean second pillars that supplement the first pillars in the light of their weaknesses. This is not the same as a second pillar where something is taken away from the first for the sole reason of operating a system in different ways. The former restores stability, while the latter endangers it.
However, we must also realise - and this has perhaps been said already, but I would just like to reinforce it - that the problems of the pension system cannot necessarily be solved by themselves, from the inside; what is more, it is likely that they cannot. More jobs are needed, stronger economic cooperation is needed, and our goal should definitely be that once the Commission has prepared the White Paper, this common thought process should somehow be linked to the objectives of the Europe 2020 strategy and economic governance. It is obvious that, if this will be the case, we will be able to continue this debate more fruitfully.
Frédéric Daerden
Madam President, I would first of all like to emphasise the important consensus work that the rapporteur has carried out. Congratulations, Ria! During the negotiation of the compromises, she has showed open-mindedness about the arguments put forward by my group, which led to a large majority vote in favour of the draft report in the Committee on Employment and Social Affairs. If we see this large a majority in favour tomorrow, it would send a strong signal to the other institutions.
This report on the future of pensions in Europe is, up to now, the only European institutional document which goes against the tide of the Commission's thinking - as represented in particular by its Annual Growth Survey - and the thinking of the Merkel-Sarkozy duo in their document on the competitiveness pact. These documents call very directly for the first pillar to be reconsidered, and also call for an automatic increase in the legal retirement age based on life expectancy. Parliament, in its amended and adopted draft report, is in favour of the following: a fundamental role for the first pillar in relation to pensions, which provides a better guarantee of solidarity, with a complementary role for the other pillars, including bringing a second pillar into general use; giving more attention to increasing the actual age of retirement as well as employment levels, in particular, those of older people, rather than an automatic and fatalistic increase in the legal age; a definition of the criteria for enabling a guaranteed minimal adequate pension to be introduced in the Member States; a strengthened role for social partners in defining and implementing all pension reforms in Europe; and the abolition of disparities between men and women in relation to pensions, which is linked to the discrimination of which Mrs Matera reminded us.
With these components, with these advances, as well as others that I could have mentioned, I am satisfied that Parliament can send our Commissioner a clear message, a social and progressive message, and I hope that she will take this into account for the next stage of the White Paper.
Marian Harkin
on behalf of the ALDE Group. - Madam President, first of all, I want to thank the rapporteur for her good work; she certainly made my life easier. I also want to thank the Commission for starting this discussion, which is certainly very timely.
Some people speak of the pensions time bomb and, given some of the figures that I have seen estimating the gap between what we currently put aside for both public and private pension provision and the resources we will need to ensure adequate pension provision for the next forty years, that gap is huge. So, in that context, the phrase 'pensions time bomb' is certainly accurate. Well, we all know what we need to do with a time bomb: we need to defuse it. I think this is the start of that process.
But the core question is: who is responsible? I think in the report, we are clear that Member States are themselves responsible for making sure that there is adequate pension provision for their citizens. But, we also state that the economies of Member States are interdependent and therefore, a coordination of pension policies using the OMC is certainly useful. However, we do not believe it is possible for the EU to set adequate pension levels or, indeed, to harmonise retirement ages.
Nonetheless, we do consider that Member States should define adequacy as the condition required for older people to live a decent life. I am pleased we have highlighted the gender issue and asked Member States to deal with the issue of men and women who take time off to care and that we have paid attention to the issue of mobility and the role of the EU 2020 strategy.
Finally, I support the inclusion of pension liabilities within the SGP. We know that a fiscal black hole is opening up in the area of pension provision and we just cannot ignore it.
Jean Lambert
on behalf of the Verts/ALE Group. - Madam President, I, too, would like to add my voice to that of others who thanked our rapporteur for the very good work that has been done on this report.
We are all aware there are national differences, as well as differences within our own political groups, and to come up with anything that gains a significant level of support is quite something. My group is especially pleased that the report before us recognises the importance of first-pillar pensions, the commitment to an adequate level, the issue of being able to provide a decent life. After all, we spent all of last year, 2010, dealing with questions of poverty. And, of course, this is also, for many people, a fixed income, an essential guarantee. Like others, we also welcome the recognition that we need to tackle decent pension provision here for women.
We also recognise the importance of tackling discrimination against older workers and using other measures to help people stay in work. For us, too, the portability of pension rights is a crucial issue. More and more people are not working for one company throughout their working life. Indeed, they are working for several, and not always in the same country. And we need to avoid this fragmentation of pension provision, so there is an essential role for the European Union there.
We are also pleased to see that this report contains a commitment for second-pillar provision, that it should be available without discrimination on grounds of age, gender and work contract. We would agree as well - and are pleased to see it there - that we need to be adopting more of a life course approach that deals with the different rhythms and patterns of modern working lives, both positive and negative.
And again we recognise the importance of solidarity in that first pillar, not least for those whose working lives are involved with more casual labour, short-term contracts and so on. We are concerned at any effort to push third-pillar private pension provision and we agree that it is crucial that people have adequate and clear information.
We would also welcome the fact that this report contains - if there is going to be a change in pension provision - adequate time for adaptation for people to reconsider their financial futures.
Julie Girling
on behalf of the ECR Group. - Madam President, my group supports the publication of this Green Paper. It is very timely and comes at a time when we are, in all Member States, debating the issues which have already been mentioned and which I will not labour - changing demographics, the gender challenge, to name just two.
The report recognises the importance of Member States sharing best practice and exchanging information, but also emphasises that pensions remain a Member State competence. It acknowledges that the EU should not legislate on the adequacy of pension levels and retirement ages, but asks - and asks very clearly and very strongly - that Member States regulate in accordance with their own circumstances, taking account of those issues.
I do believe that further work on portability is essential to strengthen the single market. EU citizens working around Europe - and I have met many - should not be left disadvantaged by having their pension pots frozen in different Member States. Demographics change and so do working practices. Our expectations change, but it is vital that we keep up with these changes in our thinking and our policy making.
Ilda Figueiredo
Madam President, in this debate, we cannot forget that there is a proposal for a so-called competitiveness pact by means of which the directorate, led by Germany, wishes to launch new attacks on the universal and mutual public social security system, to increase pension age and devalue salaries, attempting to put an end to their indexation to inflation, merely to benefit the financial sector, which is trying to find in these pensions new types of greater speculative gains.
We would like to state our clear opposition to this path towards European integration, built upon a foundation of antisocial policies which, lamentably, this report endorses, by supporting the European Commission Green Paper, by allowing a link to be made between the legal retirement age and life expectancy, by encouraging people to stay in the job market longer, and by not excluding support for private pension systems even when it is already known that their speculative use by funds and private banks can have severe consequences which leave the elderly, and particularly elderly women, in poverty.
We have therefore tabled an alternative resolution, which demonstrates that it is possible to improve benefits and pensions without increasing the legal age for retirement, provided that there is more employment with rights, particularly for young people, better salaries, and greater supervision of the financial sector and financial transactions.
We are against the increase in retirement age and we defend the pensions system integrated in the universal and mutual public social security system, which increases the value of smaller benefits and pensions, respects elderly people and allows them to live with dignity, thereby contributing to the eradication of poverty. This is what our citizens expect, through the struggles that we have had in Portugal, France, Greece, and so many other places.
Derek Roland Clark
on behalf of the EFD Group. - Madam President, in the Committee on Employment and Social Affairs on 22 November last year, the rapporteur said that pensions were exclusively a competence of the Member State. Now this has become something more like: although Member States have the lead, there are aspects where coordination at European level is important. In paragraph 9, the resolution stresses Member States' competence but calls on them to coordinate their different pension policies. There is double speak here, with EU control overturning principle.
The UK National Association of Pension Funds says that this report will make pensions more expensive - by 90% according to actuarial consultants Punter Southall. If that is exaggerated, it is certainly true that huge extra sums will be needed to prevent pensions collapsing, so premiums will rise massively. Pension firms and Member States do not need this report; they need help to keep premiums down. Otherwise, this misguided report has the potential to destroy that which it seeks to protect.
Marine Le Pen
(FR) Madam President, ladies and gentlemen, in the Europe of the Stability Pact - and tomorrow the competitiveness pact - pension reforms are in the firing line.
How can we save pensions when the European Union requires the Member States, which are now in deficit, to have balanced their budgets by 2013? Your solution is to push the retirement age up to 67 and to carry out profound reforms of pay-as-you-go pension systems to reduce benefits for insured people. Furthermore, the report is not wrong there, since it calls for a guaranteed minimum level for pensions, which you are forcing us to guarantee to foreigners arriving on our shores who have never contributed.
Moreover, counting direct public pension liabilities, as advocated in this report, will further increase the pressure on the Member States and will force them to develop pension funds based on capital formation, and we are obviously well aware of the major risks these pose.
Pension systems fall within the competence of the Member States. Yet, against the wishes of the people, you are introducing an unprecedented budgetary stringency. Employed people, civil servants and retired people in Europe will be the adjustment variable in order to save the euro and to save your ultra-liberal Europe.
Thomas Mann
(DE) Madam President, it is good that just for once, an own-initiative report is not being hidden away on a Monday and dealt with in just a few minutes. This is a result of the 463 amendments from the Committee on Employment and Social Affairs and the 211 amendments from the associated Committee on Economic and Monetary Affairs.
I would have liked to have seen a commitment to continuing the successful occupational pension systems in Germany, Luxembourg, Finland and Austria. Unfortunately, there was a majority decision to recommend new minimum standards and the application of Solvency II to occupational pensions. This will bring the risk of significantly higher costs, which, in Germany alone, could amount to an increase of 40% on the voluntary occupational pension. We must not destroy what has been achieved on the basis of a consensus between unions and management. I was able to contribute to the compromises by proposing that in future, all the effects of the minimum standards and of Solvency II must be evaluated in detail in an in-depth impact assessment. That represents progress towards the continuation of occupational pensions, although it is by no means a guarantee.
One positive point is that we do not have a standardised definition of adequate pension levels. In addition, the proposal of a harmonised retirement age for the EU has been rejected. Chancellor Merkel and President Sarkozy are rightly in favour of the gradual convergence of the pension systems and the retirement age. As birth rates and life expectancy vary in different countries, each national pension system must be adapted to meet demographic changes.
The compromises were achieved under serious time pressure. I hope that we will all be able to hold a more detailed debate on the White Paper, which will include the practical experience of businesses. The amounts involved in voluntary occupational pensions alone are greater than those in the current EU rescue package.
(The speaker agreed to take a blue card question under Rule 149 (8))
Ria Oomen-Ruijten
rapporteur. - (NL) Madam President. look, I do not want there to be any misunderstanding about this. I therefore ask you, Mr Mann, to specify where in this report it says that solvency will compulsorily apply to second-pillar pensions? I, personally, am against that, but where does it say that?
Thomas Mann
(DE) Madam President, we have had two reports from two committees which recommend applying Solvency II to occupational pension systems. In my opinion, this simply will not work. In countries such as France, they have experience of this, but not in other Member States of the European Union. We should investigate this issue in detail. We will have the chance, when we consider the White Paper and discuss it in depth, to convince everyone of this, because many people do not have the relevant experience and have not yet come across this in their own countries. This is a good opportunity for us to do the groundwork.
Pervenche Berès
(FR) Madam President, Commissioner, we are here in an orientation debate and the European Parliament wanted to make you pass on a message. However, in the meantime, the world is moving and the question of pensions is being mentioned in addition. I obviously want to mention here the reference to a standardised retirement system, at European level, at 67 years of age, which has been created in what was a draft competitiveness pact. We can clearly see that if we start from there in constructing a social Europe, well, we will be constructing it against the people, and that is not what we want.
In Mrs Oomen-Ruijten's report, we mention other orientations on many points, and I would ask you, on behalf of the Committee on Employment and Social Affairs, to take account of that when you develop the Commission's position around a White Paper, concerning taking account of the issue of gender, which you have not taken into account sufficiently.
We also mention the idea that the best means of deciding the question of retirement is to encourage employment and that rather than fixating on the legal retirement age, we must take account of real age. However, Mrs Oomen-Ruijten's report contains, in the view of the French Socialists, an indication which poses us a problem, and with which we will not be able to agree. You understand that, for us, the idea that increased life expectancy must automatically be indexed with legal age of retirement constitutes a regressive step in terms of social rights, and one which we cannot support.
Finally, allow me a final word to say to you that, without social dialogue, without the involvement of social partners in the whole of these negotiations, we will go to the wall.
Dirk Sterckx
(NL) Madam President, it seems to me that, with the help of the rapporteur, we have come up with a number of very balanced answers to the question put by the Commission. There are two points where, in my opinion, the European Union does indeed bring added value.
If we recognise the importance of the first pillar, which makes sense, then we must also admit, at the same time, that the health of our public finances is equally important, since it is sound public finances that underpin the first pillar. Next, you have to recognise the long-term strain that pensions are putting on the government and make that very clear. I think that the Commission and the European Union have a responsibility to make that clear to each Member State, so that everyone can see where the risks and the difficulties lie.
My second point is that the European Union plays a particular role in the second pillar, as well. There, you have pointed to the importance of Solvency II. What we are asking for here is that the Commission examine the risks in the longer term and that it makes clear in its rules how those risks should be hedged. I think that there, you have to specifically consider the long-term risk of pension systems in general: not just of one type, but of all pensions systems under the second pillar. So, there is a job that needs doing.
When I look at the figures, as Mrs Harkin has done, I am afraid that we have not hedged all the risks in all the Member States of the European Union.
Tadeusz Cymański
(PL) Madam President, the motion for a resolution of the European Parliament, as discussed during the consultations held by the European Commission, deserves our support. The resolution recommends stepping up mutual intra-state coordination and exchange of best practices without, at the same time, interfering in Member States' competences as regards pension systems, which is an extremely important and very sensitive area.
During the debate held in the Committee on Employment and Social Affairs, I stressed the importance of demographic developments for the security and future form of pension systems. It is therefore extremely important for us to take all possible measures aimed at overcoming the demographic crisis in Europe. When assessing pension systems and formulating proposals, I also believe that we should take into account the significant differences between the individual Member States, both with regard to their financial capabilities and in terms of the public and occupational capital-based pension systems which currently already exist.
Thomas Händel
(DE) Madam President, ladies and gentlemen, the prosperity of a country is created through the work of its people. In future, jobs in the social sector must be better paid. People want proper, secure pensions in their old age.
One clear message from the crisis is that only public and state pensions are reliable and stable. In contrast, occupational and private pension funds have lost millions of euro on the stock exchange. It is ridiculous to increase the focus on private, capital-based pension systems when providing for people's retirement. The public has financed the rescue packages for the major banks. The people are paying for a tough austerity policy which is under the control of the European Union. Now, they are supposed to turn around national budgets by taking cuts in their pensions and accepting a higher retirement age. Previous pension reforms are already leading to increasing poverty in old age. The only solution is to strengthen the reliable public pension systems.
Franz Obermayr
(DE) Madam President, the population pyramid in the EU will soon be turned upside down and the over 55 age group will represent the largest proportion of the population. Life expectancy will continue to increase and the birth rate will remain low. Young people will be starting work later and later. We are all aware of the consequences of this: an ageing population and an increasing number of bottlenecks when it comes to the financing of pensions.
What we need is a family-friendly policy in Europe, such as the introduction of family tax splitting for income tax or equivalent social measures, which take into account the contribution that the family makes to the intergenerational contract by reducing the burden of taxes on families. In addition, we need to create incentives to keep older people in work for as long as possible.
I would like to give Mr Andor a clear message. The very popular policy of mass immigration is the wrong way to go about safeguarding our pensions and it also ultimately puts social peace in Europe at risk.
Danuta Jazłowiecka
(PL) Madam President, demographic changes, longer lifespans and a falling birth rate, various privileges granted under pension systems and the economic crisis have placed enormous pressure on the public finances of the Member States. We are being forced to ask questions on an increasingly frequent basis regarding the stability and security of current pension systems, and regarding the extent to which they guarantee fair incomes during retirement. We are coming to the conclusion that reforms of Europe's pension systems, which fall under the competences of the Member States, are essential. This will be a very long-winded and expensive process, and in order for governments to decide to take such a step, the Council and the European Commission need to guarantee that the costs of these reforms will always be taken into account when applying the excessive deficit procedure. Any other solution may result in a situation where countries abandon reforms for fear of the financial burden.
I should like to refer to two key aspects of these essential reforms. Firstly, in order to guarantee the security of pension systems, we must diversify income sources and create systems based, inter alia, on public funding from capital markets and employee pension schemes. Secondly, we should ensure higher rates of employment in order to guarantee the stability of pension systems. The Member States should endeavour to ensure that the actual age of retirement is the same as the statutory age, and, wherever necessary, consider extending the statutory age of retirement, as a natural consequence of the fact that Europeans are living longer and longer. Extended working lives should, however, be associated with corresponding labour market reforms, including the provision of appropriate training and healthcare for employees.
I would like to congratulate the rapporteur and to thank her for her help and her excellent cooperation while working on the report.
Sergio Gutiérrez Prieto
(ES) Madam President, it has already been said that the backbone of pension systems in Europe is, and must continue to be, the public system, because it is the only system that guarantees cohesion and, moreover, reduces the risk of poverty in our society.
It is nevertheless striking that, in the countries of the Organisation for Economic Cooperation and Development, the greatest levels of equality in terms of income are found in pensions, or that, due to the crisis, private pensions lost 20% of their value in 2008 alone and are currently still far from meeting the required levels of solvency.
All of this shows that, at a time of unavoidable reforms, measures to ensure the sustainability of our pension systems must be cross-cutting, taking into account, among other factors, ambitious policies concerning birth rates and balancing work and family life, along with ambitious policies for ensuring that people can enter and remain in employment, or even immigration policies based on integration, which also guarantee the sustainability of our pensions from a demographic point of view.
Finally, I find it regrettable that the text does not place limits on the abuse of the concept of grants in businesses, because, as a general rule, they are exempt from any social contributions. In my view, this is essential for a whole new generation of workers, as if more is being required of them in order to have a decent pension, they should also not have to suffer so much in order to access decent employment.
Elizabeth Lynne
Madam President, I would like to thank Ria Oomen-Ruijten for all her hard work on this. I think she has done a very good job.
This makes it very clear that pensions are, first and foremost, the responsibility of Member States. Thankfully, we have rejected any call for a minimum pension at EU level, as well as for a Solvency II-type regulation to be applied to pensions. The Lisbon Treaty makes it very clear that it is Member States, not the EU, who are responsible for pension provision. But what we can do is share best practice and experience. I am pleased that my amendment calling for the implementation of the Employment Directive 2000 to outlaw discrimination on the grounds of age is also included.
With regard to the retirement age, I have always made it clear that we must keep a pensionable age - an age when you are entitled to claim your pension - set at Member State level but, at the same time, scrap the compulsory retirement age, which forces people to stop working even if they want to carry on. I am sorry that this was not in the report.
Milan Cabrnoch
(CS) Madam President, I would like to congratulate the rapporteur, who has made an excellent job of tackling the many hundreds of amendments submitted. Although the report is not legislative, it is of great importance for the future of the social systems in EU Member States. The main conclusions which we support are that:
decisions on pension systems are political decisions and are fully and exclusively the responsibility of the individual Member States;
it is essential to raise the retirement age;
the only source of growth in the EU in the coming years will be growth in the productivity of labour;
it is a key task to support the employment of older workers, particularly through greater flexibility in employment law relationships and the correct adjustment of pension systems;
it is not appropriate to coordinate pension systems and their reform at EU level;
we do not support a standardisation of the retirement age across the EU, nor do we support linking it to average life expectancy;
we do not support any efforts to unify definitions, for example, the definition of an adequate pension, at Community level.
Kartika Tamara Liotard
(NL) Madam President, subsidiarity, a matter for individual Member States, and solidarity, those were the two things that the rapporteur kept emphasising about pension policy. I therefore thought that she would immediately relegate the pro-spending cuts Green Paper to the wastepaper basket. I nearly fell off my chair when the rapporteur actually referred to the Green Paper as a positive thing.
While, on the one hand, the rapporteur keeps going on about subsidiarity, on the other, she has made countless proposals for increasing the EU's influence. The EU should provide the criteria for the minimum pension. The EU should persuade Member States to raise the retirement age. The EU should encourage competition between European pension funds and further privatisation. Subsidiarity? What subsidiarity?
If all of this were going to lead to more socially responsible pension systems, then, perhaps, you could justify the EU's influence here. Unfortunately, the Commission and the rapporteur are giving primacy to the internal market and they will only increase the divide between the rich and the poor.
David Casa
(MT) Madam President, I would like to begin by congratulating my colleague, Mrs Oomen-Ruijten, for the extraordinary work she has carried out in this report. The report recognises that in a time in which European Union citizens are particularly vulnerable, it is essential that the Member States ensure that social protection measures, and pensions in particular, are higher and more reliable, thus guaranteeing peace of mind to an ever ageing population, and ensuring that they remain economically independent.
Here, I would like to underline how important it is that the Member States define the necessary criteria in order to safeguard a decent standard of living for senior citizens. This has to be determined by the specific circumstances pertaining to each country and therefore, the principle of subsidiarity has to be respected.
I welcome, however, the invitation to the Commission to introduce guidelines and to encourage the exchange of best practice. In this way, the decisions taken will be in the interest of those who are going to be directly affected. In many Member States, pension reform is vital if we are to fulfil the objectives mentioned in the Green Paper; that is, having sound, adequate and sustainable pension systems.
The reform can be a difficult one to implement, especially in these difficult times, and therefore, the reform expenditure also needs to be taken into consideration within the context of economic governance.
Kinga Göncz
(HU) Madam President, along with several Members who spoke before me, I believe it is important that there should be as much European level coordination on the pensions issue as possible. One reason for this is that the crisis has raised the question of macro-economic stability, and it has also raised the question of how we can ensure security and dignity in old age. It is apparent that different kinds of change are taking place in the Member States. Some countries are embarking on the path of reform, and are reinforcing or creating the pillar of private pension funds, while others are attempting to turn back time instead. Whatever the nature of the change may be, however, it is very important to make the sustainability of pensions, stability, and a dignified old age the top priorities.
All changes must be consulted upon with the social partners, and sufficient time must be provided for transitions. The people, the citizens, must be informed about what changes will be implemented and how these will affect them, in order to enable them to make informed decisions in all cases, and all changes must be made in a citizen-friendly manner.
Vicky Ford
Madam President, when Bismarck introduced a state pension in 1889, the average life expectancy was just 45. Today we live longer, but face the challenge of how to achieve reasonable incomes in retirement. Economic, demographic and labour market traditions vary. Individual countries should be responsible for their own policies and reforms. Sustainable state pensions need sustainable public finances, but this Parliament's report is clear: there cannot be a harmonised EU retirement age or minimum income level.
Company schemes and individual savings should be portable from one employer to another, and across countries. Savers deserve transparent information, which is easy to understand and available. Yes, we need safe saving schemes, but rules on capital must be intelligent. Risks for pensions are not the same as insurance companies or banks. The cost of regulation falls on the consumer and, in this case, the old-age pensioner.
Elisabeth Morin-Chartier
(FR) Madam President, first, I would like to say that the crisis and demographics are combining to confront us with this problem regarding pensions in all the Member States of the European Union.
In the work that is being done, I would first like to welcome the step forward that is the consultation work that the Commissioner told us that she presided over in the development of this Green Paper, but also the work, based on consultation, open-mindedness and compromise, that was carried out by Mrs Oomen-Ruijten in order to draft this report.
I would like to emphasise three points that we absolutely must take into account in order to resolve the problem of the solvency of pensions.
The first point is the inequality faced by women of retirement age, because inequality in employment leads to poverty at retirement age.
The second point, Commissioner, Mrs Oomen-Ruijten, is that I want to make sure that widows' pensions are saved. We still have a generation of poor women who have not worked during their potential working life and for whom widows' pensions are the only way of getting a minimum pension.
The third point is the entry of the younger generations on to the labour market. They not only have to face the crisis, but they also have to carry the burden of several generations: their children, their parents and their grandparents.
Finally, that poses the problem of senior citizens, a problem which we must deal with more quickly in our work.
Jutta Steinruck
(DE) Madam President, ladies and gentlemen, pensions throughout Europe must provide enough money for people to live on. One important requirement is that people have decent jobs, because low paid jobs result in poverty in old age and inadequate pension provision. When I hear other Members of this House saying that people simply need to take out an additional private pension for their old age, I want to reply that many people can barely survive on what they earn, never mind paying for an additional private pension. This is why the first pillar of the pension system is of particular importance. The pay-as-you-go system based on the solidarity principle must form the foundation of European pensions and it must provide enough for people to live on. We cannot simply say that this is a matter for the Member States. We must send out a clear signal that we need pensions which give people enough money to have a reasonable quality of life.
Mr Mann gave a detailed description of the German occupational pension system. I would like to mention it too, without going into the same level of detail. In my assessment of the Green Paper, I have come to the same conclusion, which is why we worked on the amendments together in committee. Therefore, I am calling on the Commission to ensure that, in everything which we do in future, the distinctive features of each country - the things that really work well and are essential for the survival of the pension systems in the Member States - are not disregarded.
Theodor Dumitru Stolojan
(RO) Madam President, I believe that we need to be realistic and acknowledge that the current public pension systems, based on the transfer of resources between generations, known as the 'pay as you go' principle, are no longer economically viable and, as such, they require public budget subsidies to survive.
The ageing population trend and increasing labour mobility only serve to exacerbate the imbalances in these pension systems, while the measures being proposed, whether raising the retirement age or increasing contributions, are limited and will be increasingly restricted as well by social resistance to measures of this kind. Ultimately, we will have to acknowledge that the solution is to switch to those pension systems where people build up their own pension fund over the course of their working life.
Ádám Kósa
(HU) Madam President, the European Union has addressed a great many issues related to people with disabilities. Unfortunately, it is this very social group that Member States' pension systems do not really seem to cover, which is unacceptable. In addition to people who were forced to enter the disability pension system through no fault of their own, there are a great many who entered the system by abusing loopholes. This problem primarily affects the pension systems of Central and Eastern Europe, where there is a very large number of such abusers. Their numbers are so high that they are shaking the foundations of the pension system itself. This situation goes against the EU 2020 strategy. These people are receiving non-personalised services instead of real assistance, while they could hold their own in the labour market and would be capable of working. Current forecasts indicate that the number of dependants in Europe will soon double. Meanwhile, the number of working age people is dropping by one million per year. In summary, this means that there is currently no sustainable pension system, especially not without active people with disabilities. I wholly support the idea of the rapporteur that in the EU, which is home to 50 million people with disabilities, only forty-odd percent of these people are working. Where is the other sixty-odd percent? The bottom line is that they, too, should be working.
Konstantinos Poupakis
(EL) Madam President, I should like to congratulate the rapporteur on her efforts to strike the necessary balance between the economic viability and the social adequacy of pension systems, given that, in times of high unemployment, deregulation of the labour market, wage cuts and serious demographic challenges, the creation and consolidation of adequate, socially fair and economically viable pension systems is a major challenge for every Member State.
However, systems must be based on the first pillar, the public, redistributive pillar, as the only basic guarantee of adequate benefits. This pillar should be supplemented, not supported by the second pillar, which should function in tandem, once care has been taken to safeguard not only universal access to it, but also its security, by establishing the relevant governance framework.
In addition, linking a later retirement age to life expectancy does not, by any means, result in automatic adjustments. Of course, other parameters have to be factored in, such as location, nature of work, very unhealthy occupations, quality of life and health. Finally, any incentives to remain in work should, as a precondition, include safety valves to overcome any barriers which might prevent young people from accessing the labour market, especially at a time when unemployment has, unfortunately, soared to invisible heights.
(Applause)
Elżbieta Katarzyna Łukacijewska
(PL) Madam President, the debates being held in certain EU Member States regarding pension systems, and the public emotions accompanying these debates, show how important and, at the same time, how difficult this subject is. It will not be possible to adopt a single pensions model which would apply in all EU Member States. However, at a time of economic crisis and demographic change, reforms of national pension systems are becoming unavoidable. It is already the case today that many countries are experiencing problems due to the growing cost of pensions, and such problems may undermine the principle of intergenerational solidarity. However, we must remember that pensions must be secure and safe, and that they must take into account what we are paid. In this context, I would like greater attention to be paid to the pay difference between women and men, since women's lower earnings result in reduced pension benefits.
Rovana Plumb
(RO) Madam President, I would like to mention that, even at the start of this debate, the Commissioner was talking about the successes of the European social model. One of these is also the achievement of equal opportunities for women and men. I hope that this report will send a clear message about integrating gender equality as part of achieving a fair pension system.
This is why I want, if I may, to emphasise three points. Firstly, the assessment of the impact on society and female employment of measures to recognise work done in the home, including the use of a costed calculation of this work for pension purposes. I call on the Commission to initiate the procedure aimed at removing Article 5(2) of Directive 2004/113/EC which allows for discrimination against women in the case of pension products.
Izaskun Bilbao Barandica
(ES) Madam President, the pensions system is a basic element of the European social model that must be preserved. It is the responsibility of the Member States, but in order to guarantee its survival, we need to take measures, with the highest possible level of agreement with social partners and civil society. These measures need to be focused on setting a European standard that guarantees the solvency of all systems by making them subject to supervision criteria in order to limit the deficit in public finances across the Member States, and by extending the guarantees that are going to be demanded of insurance companies from 2013 to the mutual societies that manage these systems in some Member States.
This standard needs to be set in order to rationalise the debate, because solving this problem means more than setting the retirement age in law. We need to take into account a person's length of employment and contribution levels, and incorporate factors associated with the desires of retired people. Extending one's working life must result in an improved pension.
This standard also needs to look to the future. The mobility of workers is going to require that transferring passive rights from one country to another will not be a problem. When they move countries, Europeans need to be able to access their employment history in all the Member States where they have made contributions.
I also think that we need to pay particular attention to gender and disability.
Elisabeth Schroedter
(DE) Madam President, Mr Andor, I would like to ask whether it makes sense to respond to this debate and this report with a White Paper. Should we not instead be attempting to resolve the really urgent problems? In my view, there are two issues: one is the fact that there is a huge gap between the actual retirement age and the state retirement age. This means that the anti-discrimination measures really need to be put into effect, in the form of action or monitoring by the Commission to improve the situation, because that will make pensions sustainable.
The other is that the report clearly calls for action to be taken now on the portability of occupational pensions, which means considering a new directive. This is much more urgent, because workers who move from one company to another lose a lot of money on their pensions, which would give them security in their old age. This is why we need to take steps in this area. With the White Paper, we are just wasting time.
Alfreds Rubiks
(LV) Madam President, ladies and gentlemen, as a result of the economic crisis and the ageing of the population, contributions to social security budgets are falling. That is a generally recognised fact. The number of pensioners is increasing. This poses a threat to the sustainability of the pensions system. It is essential to adapt the social security and pensions system to today's challenges. I agree with the Commissioner when he said it would take a great deal of hard work to produce this document. Nevertheless, I believe that we must establish a social fund on an EU-wide scale, equivalent to the Cohesion Fund, with the aim of assisting pensioners in those countries with relatively low revenues. National budgets cannot secure a decent old age. We already have experience of this. Last year, we fought against poverty, and the result is that we have more poor people than before.
László Andor
Member of the Commission. - Madam President, I would like again to congratulate all the committees that have been involved in the discussion and also in producing the reports.
I realise that it is hard to bring the positions from so many different political and national backgrounds into line, but the votes in committees involved show that the reports have been met with wide support. This sends a clear signal to the Commission on the follow-up to the Green Paper. I expect to publish a summary early next month with Parliament's opinion included. We will follow this up in the second half of 2011 with the White Paper, which I mentioned in my earlier intervention, accompanied by a suitable impact assessment. This will give all stakeholders the opportunity once again to continue playing a part in the debate.
The Commissioners' Group on pensions already discussed last week possible policy options on how to update and improve the European framework on pensions. There was agreement that we should continue with the holistic approach to the pension reforms.
As part of this, we need to continue a dialogue with the key stakeholders, both on possible new regulatory initiatives in such fields as portability, occupational pension schemes and insolvency protection, and other softer forms of regulation, such as codes of good practice. We also decided to deal with the gender dimension in depth and also address it more extensively in the White Paper than in the Green Paper.
In the meantime, I would like to make sure that the Green Paper and the White Paper do not get mixed up with other flying objects in the European sky. The Commission has absolutely nothing in common with approaches that assume that there could be a uniform retirement age in the European Union. Diversity is key in the EU and it also applies to diversity of the demographic reality, and we have to study that more deeply now than before.
We should also recognise that ongoing reforms carry new risks as they make future pensions far more dependent on long-term developments in the labour market and financial markets. This means that we need to create employment opportunities also for people with disabilities and increase the stability of financial systems.
I look forward to continued work with Parliament and its committees on this very important subject.
Ria Oomen-Ruijten
rapporteur. - (NL) Madam President, I would like to take this opportunity to credit my fellow Members who have worked with me on this report: George Cutaş, Barbara Matera and Cornelis de Jong. I do not know where Mr de Jong is. There he is, at the back. He has made a few comments which I do not understand, for example, when he says that we want to find a European solution for everything. That is not true. Subsidiarity is the guiding principle here.
If I could clarify the point where Mr de Jong had an issue with economic governance: we want the kind of economic governance that will ensure that everybody who is trying their level best will come out a winner. That is what we want, and not for a number of Member States - the ten which have written us a letter - to be penalised for having made good provisions for the future, for their pensions. I hope that satisfies you, Mr de Jong.
Kartika Liotard is not here, but I am struck that she does not appear to have read the report and, yet, she comments as if she had.
Madam President, I have already thanked my fellow Members Cutaş, Matera and De Jong, but I would also like to thank Frédéric Daerden, Marianne Harkin, Julie Girling and Jean Lambert, who have spoken on behalf of their respective groups, as well as Danuta Jazłowiecka, the shadow rapporteur from my own party, the Group of the European People's Party (Christian Democrats), for having made this report what it is. I think that we have produced a sound analysis of what needs to be done.
I also know that there are still some very sensitive issues in the report which concern individual Member States. Nevertheless, I hope that we, the Committee, and you, Commissioner Andor, have helped put things on the right track, that we will be able to rally round the White Paper, as well, in this Parliament, and that everyone will also vote in favour of it. It was a tough dossier, but I hope that tomorrow we will be able to say: 'all's well that ends well'.
President
The debate is closed.
The vote will take place at midday tomorrow (Wednesday, 16 February 2011).
I would remind those of you who have not had the opportunity to speak that, if you wish, you can submit a written statement not exceeding 200 words which will be annexed to the verbatim report of proceedings, should you wish to keep a record of what you wanted to say if you had been able to do so.
Written statements (Rule 149)
Corina Creţu
The most vulnerable pension system in the EU is the public system, based on intergenerational solidarity. However, a pension is an inherited right and governments cannot violate it, whether there is a crisis or not, even if some governments, such as the Romanian Government, feel free to do anything they want regarding the pension amount and the method for calculating it. The demographic situation is not in our favour either. Therefore, the system's sustainability is an urgent problem. However, public pension systems are not financed by governments, but by those who contribute to them: social partners, employees and employers, regardless of their type. These systems are severely affected by two factors: illegal work and the inability of Europe's economies to create new jobs offering decent pay and of a reasonable duration. Poorly paid, precarious jobs, on the pretext of making the labour market more flexible, mean that public systems will be permanently in crisis. I find it encouraging that the European Parliament resolution on pension systems emphasises the discrimination against women with regard to the pension amount, even though the age and period of time for making contributions will be virtually the same as those for men. This is a first step towards righting an injustice, which must be followed by subsequent measures.
Vilija Blinkevičiūt
The European Commission's Green Paper presents convincing arguments as to why we need to improve current pension systems. However, we must not forget that most of the solutions proposed are socially sensitive.
We must therefore evaluate carefully not only the benefits of these solutions, but also the potential risks, particularly when we are talking about increasing the retirement age or Member States losing influence in pension policy. Although the Commission considers raising the retirement age to be one of the less painful ways of adapting to increasing life expectancy, it does not provide specific proposals on the employment of elderly people in the labour market. With the possibility of delaying retirement, many unemployed people under the pensionable age may land in the poverty trap. Insufficient consideration has also been given to how much people's health will allow them to work longer. Furthermore, we must take into account the fact that women take lower paid or part-time work more often than men and that due to childbirth and motherhood, and caring for children and disabled family members, they lose insurance guarantees and ultimately receive smaller pensions. I feel that we must also focus more on other means of improving pension systems, such as timing the start of working life, better reconciliation of work and family life, a 'flexible' assessment of retirement age, the introduction of minimum standards for pensions, etc.
In any case, I would view the Green Paper as a serious step towards ensuring normal living conditions for current and future pensioners.
Alajos Mészáros
Changing demographic indicators and longer life expectancies urge us to develop a new strategy with regard to our pension systems. We must redefine issues concerning the future in relation to the young and the old, in order to be able to ensure the sustainable, secure and appropriate disbursement of pensions. There are major differences between European Member States in terms of their pension systems. While Western European countries are struggling with the problems of increasing current and future costs, new Member States are attempting to set up diversified systems. While, in 2008, there were four employees to support every pensioner, in 2020, there will be five. The reasons for this include the fact that, due to their longer, more comprehensive training, European youths enter the labour market at a later age, and that the employment relationships of employees do not last until the statutory retirement age.
We need to establish a system which is sustainable and guarantees pensions by taking into account the situation of the Member States. We must also consider the possibility of free movement within the EU. We must start with the assumption that the effective and successful labour market of the new generation will also require mobility. For the future reform of pension systems, it will be essential to link the first and second pillars, which are already partially overlapping in the various Member States, and these must also be closely linked to the third pillar. We must also endeavour to eliminate illegal employment, which has a similarly crucial role in the preservation of our pension systems.
Vasilica Viorica Dăncilă
The ageing population trend facing Europe in recent years is bringing about major changes in the field of medicine and consumption habits, as well as to the population structure and social security system. In these circumstances, ensuring pension systems' viability in the future is closely linked to how long EU citizens are effectively active on the labour market. I feel it is beneficial that the EU 2020 strategy supports an active, focused labour market policy, which will help increase the employment rate of older workers, women, members of minority groups and the long-term unemployed. By achieving this objective, I believe that Europe will see an increase in the number of people in work and, by extension, economic growth, which will have a positive impact on the viability of pension systems at EU level.
Jarosław Kalinowski
We all know that there is no such thing as an ideal model for pension systems. Every country has developed its own solutions and has plans for future reforms which are adapted accordingly. In spite of the significant differences between the individual systems, I believe that the European Union should indicate the direction to be followed by all Member States when making changes. It was emphasised many times in committee that the financial and economic crisis of recent years has highlighted the urgent need to carry out reforms of the pension systems. The principles of solidarity and subsidiarity oblige us to strengthen cooperation between the Member States in this area. Sharing our experiences will enable us to avoid wasting time on duplication, which has already led to disaster in one country, and exchanging information on best practices will make it possible to develop the best strategies effectively.
Let us not forget that the reforms must not be limited merely to raising contributions and extending the period during which contributions are made. Budgetary stability, the cross-border coordination of pensions, the development of minimum guarantees and equal rights for women and men are only some of the issues which should be the subject of deliberations in every Member State. A sustainable system based on mutually dependent and complementary pillars should be developed throughout Europe, incorporating public, employee and private pensions, as well as capital and non-capital pensions. I believe that this solution will guarantee the creation of stable and fair pension systems which will, at the same time, remain flexible enough to adapt to the social and economic changes we are experiencing.
Zuzana Roithová
Due to their ageing populations, nearly all countries in the world are facing the question of how to finance pension systems based mainly on flexible funding in the future. I welcome Mrs Oomen-Ruijten's excellent report, which opens up the possibility of a solution, while respecting subsidiarity. I would like to mention a solution which has been promoted for many years by the Christian and Democratic Union - Czechoslovak People's Party (KDU-ČSL) in the Czech Republic. Children who are in gainful employment should have the option to redirect part of their mandatory contributions to the flexible system to their parents' pension account, and partially offset the costs expended on their care in childhood through this contribution to a higher pension for their parents. This individualised inter-generational solidarity would, on the one hand, be fairer for today's pensioners, who have done a decent job of raising the new generation, while, on the other, it would surely help towards rehabilitating social attitudes to large families. It should pay to have children, rather than just being a cost. This is the key to a permanent solution both to the consequences and to the main cause of our pension problem.
Jaromír Kohlíček
Ten years of work on a Green Paper erroneously entitled 'Towards adequate, sustainable and safe European pension systems' has resulted in nothing more than a random collection of nonsensical assertions. I do not know how it is in other countries, but in the Czech Republic, for example, the projected birth rates drawn up by experts 10 years ago differ so dramatically from the current state of affairs that the assertions of the Green Paper for the 2040-2060 period are, in my opinion, nonsensical. If the experts are unable to predict the development of the birth rate even over five to seven years, how can their forecast for a period of more than 30 years have any value? The entire Green Paper is based on the erroneous assumption that, as long as I impose a legal obligation on the taxpayer to invest a portion of the resources assigned to the pension system into a fund not guaranteed by the state, he will get a higher pension that he would from the first pillar alone. A responsible constitutional court would necessarily describe such a law as unconstitutional. Even in countries where the second pillar has been introduced in the past, it apparently failed to produce the expected results. For example, in Chile in the 1970s, after the overthrow of Pinochet, private funds not guaranteed by the state became mandatory for citizens outside the army and the police. Why was this? Why is the current conservative government in Hungary also dismantling the ineffective second pillar of pension provision? These are the main reasons why the Confederal Group of the European United Left - Nordic Green Left cannot vote for Mrs Oomen-Ruijten's report. We cannot support the planned crime of the century!
Louis Grech
in writing. - The EU and Member States face one of their biggest challenges with regard to ensuring adequate and sustainable pension systems in Europe. Given that a large percentage of citizens are highly dependent on their pension schemes for their livelihood, I would like to emphasise the importance of the state-financed pension schemes based on the principle of solidarity.
In multifaceted situations with various traditions and types of pension scheme, and given that the main responsibility for pension reform rests within the remit of Member States, it is impossible to apply the principle of one-size-fits-all. The EU can, however, add value by providing coordination between the various pension schemes and sharing best practice.
Any review of pension systems should be carried out in a transparent way, protecting consumers' needs and informing citizens of their rights with regard to the various pension schemes and the risks involved, especially those related to cross-border mobility. Pension systems should be able to withstand any potential budgetary and demographic pressures on Member States without putting undue pressure on ordinary citizens.
All this needs to be addressed through the prism of the demographic and socio-economic challenges of the future, such as the development of atypical employment, a growing female labour force, changes in family structures, and youth unemployment.
Angelika Werthmann
Some of the subjects in the Commission's initiative on this Green Paper seem to me to be particularly important. I see it as our duty to prevent older citizens in particular, who have helped to build up our current levels of prosperity during their working lives, from ending up in a vulnerable situation in their old age. At the same time, the report takes proper account of the subsidiarity principle. The Commission should make a clearer call for equality between men and women. Women more often have atypical employment contracts than men. Their pensions are often smaller and, therefore, they are at greater risk of suffering poverty in old age. Appropriate and secure pension systems represent long-term intergenerational contracts. Therefore, I would like to encourage the Commission to use the Green Paper to launch initiatives which generate greater public awareness of the solidarity between the generations on the subject of pension provision.
Elena Băsescu
I think that the EU needs to create an open unitary pension system which will take into account demographic trends and the issue of mobility. Let me give the example of my own country. In Romania, the annual expenditure on pensions is the largest category of budgetary expenditure. The state social insurance budget has recorded an annual deficit ever since 2006, reaching EUR 1.5 billion in 2009. According to the World Bank's estimates, in 2050, the deficit produced by pensions expenditure would have reached approximately 12% of GDP under the old system. This is why, by adopting Act no 263/2010, Romania has introduced a series of major reforms which will ensure the sustainability of the public pension system in the medium and long term. These reforms include: - discouraging early retirement and retirement through disability on unjustified medical grounds; - increasing the number of people contributing to the public unitary pension system; - gradually raising the normal retirement age for men and women, to 65 for men by 2015, and to 63 for women by 2030.
Ville Itälä
All pensions at present are the responsibility of each Member State, but the EU also has a strong role to play in pension policy. For us to be able to achieve our objective, which is that the free movement of people and labour is genuinely free, pension systems must be adequately harmonised. A minimum level for pensions must also be guaranteed, so that families can actually move around completely freely. Accordingly, we need to move towards a harmonised system, and the sooner the better. Otherwise, a nonuniversal system of pensions will actually create a barrier to free movement within the EU.
Joanna Katarzyna Skrzydlewska
I was glad to learn that the report on the Commission's Green Paper on adequate, sustainable and safe European pension systems would be added to today's agenda. The issue of future pensions, how safe they are, and what income they will provide is currently one of the most important problems facing society. Although the Member States are responsible for deciding on the shape to be taken by pension systems, and, in principle, the European Union is not authorised to take action in this area, certain legislative solutions relating to pension systems should be worked out at EU level. Parliament's demand that the Commission develop guidelines for the governments of the Member States is of great significance for the economic security of pensioners, since the guidelines would set minimum levels for pensions and criteria for calculating pension benefits, which would mean that women's pension benefits would no longer fall short of men's. Women are condemned to lower pensions than men through no fault of their own, due to being paid different amounts for the same work or to the need to interrupt their career to care for children, which results in lower contributions over their entire working life. In the face of threats to the stability of pension systems, the Commission should therefore not forget to ensure that legal solutions are introduced which guarantee the equal treatment of women and men throughout the EU as a whole as far as the level of future pensions is concerned.
Mara Bizzotto
On reaching the horrific figure of 23 million unemployed, Europe in 2011 has beaten every negative record of the decade in the field of employment policies, thus officially branding them a failure. The crisis is more than sufficient grounds for adopting a text in which the appeal to apply the principle of subsidiarity to the area of pensions shows that the Eurocrats have become more reasonable again in revising a European social model that has certainly failed. After a decade of being sidelined, the governments are stepping in and becoming the main players in the rebuilding of social Europe. That is not enough, however: only a brave decision in favour of grassroots democracy, based on employment reforms that make work more attractive and on payslip federalism that takes account of the different costs of living in each region of Europe, against which both wages and pensions would be readjusted, would constitute a real change of direction towards renewal. Lowering the cost of labour by reducing taxes, and giving our small enterprises the chance to carry on working and investing in the region, are essential moves to ensure equalisation of contributions for the older generations and a future of certainty and quality of life for the new ones.
