The European Commission has published a Green Paper suggesting, among other things, that private pension schemes should meet solvency requirements and that there should be a Europe-wide pension regulator.
The issue has come to the fore because Europe faces some serious demographic challenges. Time magazine estimates that by 2050 there will be twice as many people aged over 65 as those aged under 15. Put simply, Europe will not be producing enough younger workers to pay for their elders’ pension through their tax contributions.
The Green Paper invites comments and suggestions from all sectors of the European Union. No doubt the Commission realises that the “pain” will have to be shared among everyone – employees, employers and older people alike. The paper envisages that no single measure will be enough to solve the problem. Lower payments, higher contributions and higher retirement ages may all have to be imposed.
Some of the criticisms that have been levied at the European Commission so far include the suggestion that they are trying to impose a one size fits all solution on a selection of diverse nations.
For example, take the issue of state retirement age. In the United Kingdom and Ireland, the retirement age will be 68 in a few decades’ time. Whilst there has been concern expressed in some sections of the community at this prospect, the workforce typically (albeit reluctantly) acknowledge that something has to be done to preserve the state pension. Germany and Spain are considering raising their age to 67 from their current 65. Likewise, this will not be popular.
In France however, the powerful unions have called tens of thousands out on strike and organised protests in the streets at the government’s ridiculous suggestion that their retirement age should be – wait for it – 62. Compared to their European neighbours, this is still very low retirement age.
