Report 2018 Pension Adequacy
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PENSION ADEQUACY REPORT 2018 CURRENT AND FUTURE INCOME ADEQUACY IN OLD AGE IN THE EU VOLUME 1 European Commission Directorate-General for Employement, Social Affairs and Inclusion 1049 Brussels BELGIUM Manuscript completed in 2018 Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use that might be made of the following information. Luxembourg: Publications Office of the European Union, 2018 © European Union, 2018 Reuse is authorised provided the source is acknowledged. The reuse policy of European Commission documents is regulated by Decision 2011/833/EU (OJ L 330, 14.12.2011, p. 39). For any use or reproduction of photos or other material that is not under the EU copyright, permission must be sought directly from the copyright holders. Cover photo: ©Shutterstock PDF ISBN 978-92-79-85657-0 doi:10.2767/406275 KE-01-18-457-EN-N European Commission Directorate-General for Employment, Social Affairs and Inclusion Social Protection Committee The 2018 Pension Adequacy Report: current and future income adequacy in old age in the EU Volume I Joint Report prepared by the Social Protection Committee (SPC) and the European Commission (DG EMPL) 2018 Acknowledgements The 2018 Pension Adequacy Report (PAR) has been prepared by the Directorate General for Employment, Social Affairs and Inclusion of the European Commission (Unit C2 ‘Modernisation of social protection systems’, headed by Radek Malý (until 31 December 2016) and Ana Carla Pereira), in collaboration with the Social Protection Committee (SPC, chaired by Ulrika Hall) and its Working Group on Ageing Issues (SPC WG-AGE, chaired by Andraž Rangus) and the Indicators Sub-group (chaired by Rudi Van Dam, with Volker Schmitt chairing the discussions on the PAR). The report, consisting of two volumes (main report and country profiles), was adopted by the SPC on 25 April 2018. The Secretariat of the SPC WG-AGE was coordinated by Audronė Balkytė-De Smedt. The report was drafted by the EMPL C2 Pension team: Fritz von Nordheim Nielsen (Deputy Head of Unit, until 30 September 2017), Valdis Zagorskis (team leader), Ettore Marchetti and Audronė Balkytė-De Smedt. The drafting of Volume I has integrated important contributions from the ESPN network1 (Slavina Spasova and colleagues), OECD, the SAAGE network2 and SHARE3. The report used the underlying assumptions for the 2018 Ageing Report of the European Commission (Directorate-General for Economic and Financial Affairs) and the Economic Policy Committee4. Other data used in the report were provided by Eurostat, the Member States, OECD, SHARE and the ESPN. 1 ESPN – the European Social Policy Network, http://ec.europa.eu/social/main.jsp?catId=1135&langId=en 2 SAAGE – Scientific Analysis and Advice on Gender Equality in the EU (contracted by the European Commission’s Directorate-General for Justice and Consumers). 3 SHARE – The Survey of Health, Ageing and Retirement in Europe, http://www.share-project.org/ 4 https://ec.europa.eu/info/publications/economy-finance/2018-ageing-report-underlying-assumptions-and-projection- methodologies_en 3 Members of the Working Group on Ageing Issues of the Social Protection Committee (SPC WG-AGE) Chair / Slovenia Mr Andraž RANGUS Institute for Macroeconomic Analysis and Development Back-up to the Mr Aurelio FERNÁNDEZ LÓPEZ Ministry of Employment and Social Security Chair / Spain * * * Mr Dirk MOENS Federal Public Service Social Security Belgium Mr Michel ENGLERT Federal Planning Bureau Mr Gijsbrecht DEKKERS Bulgaria Ms Gergana PEEVA National Social Security Institute Mr Mihail ILIEV Ministry of Labour and Social Policy Czech Republic Ms Zdeňka HLÁSENSKÁ Ministry of Labour and Social Affairs Mr Jan ŠKORPÍK Denmark Ms Charlotte Hvid OLAVSGAARD Danish Agency for Labour Market and Mr Vigithan SIVARAJAH Recruitment Germany Mr Volker SCHMITT Federal Ministry of Labour and Social Affairs Mr Francois PEGLOW Estonia Mr Lauri LEPPIK Estonian Institute for Population Studies Mr Tõnu LILLELAID Ireland Mr Darragh DOHERTY Department of Employment Affairs Social Ms Margaret MULHALL Protection Greece Ms Aspasia STRANTZALOU Ministry of Labour, Social Security and Social Solidarity Spain Mr Aurelio FERNÁNDEZ LÓPEZ Ministry of Employment and Social Security Mr Antonio BLÁZQUEZ MURILLO France Ms Maria RHOMARI Ministry of Solidarities and Health Ms Carine FERRETTI Croatia Ms Sandra FRANKIĆ Ministry of Labour and Pension System Mr Alen BUČIĆ Croatian Institute for Pension Insurance Italy Mr Edmondo SALINARO Italian National Institute of Social Security Ms Antonella DELLE MONACHE Ministry of Labour and Social Policies Cyprus Ms Maria CHRYSOSTOMOU Ministry of Labour, Welfare and Social Mrs Andri PAVLOU Insurance Latvia Ms Daina FROMHOLDE Ministry of Welfare Ms Liene RAMANE 4 Lithuania Ms Vidija PAŠTUKIENĖ Ministry of Social Security and Labour Ms Inga BUŠKUTĖ Luxembourg Mr Gerard JOHANNS General Inspectorate of Social Security (IGSS) Mr Kevin EVERARD Hungary Ms Erika Ildikó LUKÁCS Ministry of Human Capacities Mr Ádám RÉZMOVITS Hungarian State Treasury Malta Mr Edward BUTTIGIEG Ministry of Finance Mr Melchior VELLA Ministry of Finance Netherlands Mr Lennart JANSSENS Ministry of Social Affairs and Employment Austria Mr Michael TOPF Federal Ministry of Labour Social Affairs and Ms Irene FIEDLER Consumer Protection Poland Mr Krzysztof SZYMAŃSKI Ministry of Family, Labour and Social Policy Mr Dominik KOMOREK Mr Ryszard MIKONOWICZ Portugal Ms Rute GUERRA Ministry of Labour, Solidarity and Social Ms Rita FIGUEIRAS Security Romania Ms Mihaela KANOVITS Ministry of Labour, Family and Social Ms Olivia RUSU Protection Slovenia Mr Andraž RANGUS Institute for Macroeconomic Analysis and Development Mr Davor DOMINKUŠ Ministry of Labour, Family, Social Affairs and Equal Opportunities Slovakia Mr Marek PLAVČAN Ministry of Labour, Social Affairs and Family Mr Miroslav DANČEK Mr Slavomír ĎURIŠKA Finland Ms Susanna GRIMM-VIKMAN Ministry of Social Affairs and Health Ms Marjukka HIETANIEMI Finnish Centre for Pensions Sweden Ms Elisa BARONI Ministry of Health and Social Affairs Mr Kristian ÖRNELIUS Mr Kristoffer LUNDBERG United Kingdom Mr Alan NAPIER Department for Work and Pensions 5 Contributors in DG EMPL Unit C2 ‘Modernisation of social protection systems’ Ms Ana Carla PEREIRA, Head of Unit Mr Fritz VON NORDHEIM NIELSEN, Deputy Head of Unit (until 30 September 2017) Mr Valdis ZAGORSKIS, Pension Team Leader Ms Audronė BALKYTĖ-DE SMEDT, Secretary to the SPC WG-AGE Mr Ettore MARCHETTI, Policy Officer 6 FOREWORD For the third time already, the European Commission and the Social Protection Committee have joined efforts to produce the Pension Adequacy Report. This report, published every three years, provides an unparalleled overview of Member States' pension policies focusing on the adequacy of old-age incomes today and in the decades to come. It poses the key questions about how pension systems serve our citizens, namely: How well protected are older Europeans against poverty today? What levels of protection will future pensioners enjoy? How does the income of men and women change when they retire? And how to strike a balance between working life and retirement years, as life expectancy continues improving? Besides the regular analysis of old-age incomes and pension policies, each edition of the Pension Adequacy Report brings new issues into focus, reflecting the dynamic EU social agenda and the profound transformations taking place in European societies and the world of work. The 2018 report highlights areas that are key to attaining the principles of the European Pillar of Social Rights. It reflects on the gender differences in old-age poverty and pension entitlements that, despite incremental improvements, remain staggeringly large. For the first time, the report explores in detail the opportunities for people in different types of employment and self-employment to acquire adequate pension rights. The report equally dwells on how supplementary savings, in particular occupational pensions, contribute to old- age incomes in different Member States. As the 2018 Pension Adequacy Report observes, pension adequacy concerns are again high on the agenda in a number of Member States, as they strive to maintain adequate pension incomes in ageing societies. We hope that the findings of this report will prove a valuable source of reference for the policy debates at national and EU level. Marianne THYSSEN Ulrika HALL Commissioner for Employment, Chair, Social Protection Committee Social Affairs, Skills and Labour Mobility 7 TABLE OF CONTENTS FOREWORD ............................................................................................................................ 7 KEY CONCLUSIONS OF THE PENSION ADEQUACY REPORT .............................. 15 1. INTRODUCTION .............................................................................................................. 21 1.1. Purpose, scope and content ....................................................................................... 21 1.2. Types of pensions covered ......................................................................................... 21 1.3. The three aspects of pension adequacy considered in the report .......................... 22 1.4. Further aspects of the multi-dimensional approach .............................................. 24 1.5. Groups meriting particular attention ...................................................................... 25 1.6. Looking to the future ................................................................................................