27 February 2013

ECON opinion on an Agenda for Adequate, Safe and Sustainable Pensions

ECON considers it to be a fundamental principle that first pillar pensions must be poverty-proof, available to all, whether they have been active or not in the labour market, and adopt a lifecycle approach which takes into account a lifelong career, including career interruptions and changes, so as not to punish people with “non-standard” working lives and to recognise the contribution of voluntary work and other unpaid care work which is both socially and economically beneficial

ECON calls for the strengthening of the EU’s social dimension; stresses the validity of the principle of subsidiarity in the areas affected by Initiative 1; encourages the Commission to take stock of the progress made in the Member States regarding pension reforms in its country specific recommendations that follow from the 2013 Annual Growth Survey; and welcomes the recognition that pension systems must be strengthened in the face of long-term demographic changes, market instability and low interest rates.

ECON welcomes the support; stresses in particular that the planned support could facilitate the exchange of best practices between Member States, for instance to increase labour market participation rates, most notably in the over 55-age group, which vary widely between Member States.

ECON emphasises that second-pillar pension funds are important long-term investors in the real economy; invites the Commission to take stock of the cumulative effects of financial market legislation (e.g. EMIR, MiFID, CRD IV) on second-pillar pension funds and their ability to invest in the real economy; and to report on this in its forthcoming Green Paper on Long-Term Investments.

ECON stresses that any further EU regulatory work concerning precautionary measures must be built on a solid impact analysis which should include the provision that similar products be subject to the same prudential standards, adequate provisioning and worker mobility within the Union, and should have the overall aim of safeguarding the accumulated entitlements of employees; stresses that any further EU regulatory work on precautionary measures must be also built on an active dialogue with social partners and other stakeholders and on a genuine understanding of and respect for national specificities; emphasises that pension systems are deeply embedded in the cultural, social, political and economic circumstances of each Member State; and stresses that all 2nd pillar pension providers, whatever their legal form, should be subject to proportionate and robust regulation that takes into account the characteristics of their business, particularly with a long-term focus.

ECON calls on the Member States, inter alia on the basis of the 2012 Pension Adequacy Report, to intensify their work on preventing old-age poverty; and points out that if bold action is not taken on strengthening pensions systems in this regard, the Europe 2020 goal on poverty and social exclusion will probably not be reached.

ECON stresses that a key to building more sustainable and adequate pension systems is to focus on eradicating inequalities between women and men; emphasises that enhanced measures have to be taken in all Member States in this regard, for example when it comes to promoting equal pay, fighting gender-based discrimination, granting pension credits to caring for children and the elderly, reducing the incidence of involuntary part-time work, and improving work and pension conditions in precarious jobs.

Full opinion

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