Policy Options and Issues in Reforming European Supplementary Pension Systems

Útdráttur

Most industrialized countries are struggling with reforming their retirement income systems. The systems have mainly been based on public pay-as-you-go plans but as the systems have become mature they have increase the fiscal burden of nations and become an inadequate device for financial insurance for the old. Consequently, almost all the European countries will need either to refund their retirement liabilities or reform their retirement systems to reduce or restrict benefits. There is already a significant volume of supplementary pensions in Europe; about 25% of the labour force is covered and more than 2 trillion ECU of funds are under management. The proposed EU occupational pension’s directive provides a framework for the growth of some of these supplementary pensions in EU Member States. This paper identifies and discusses ten important economic issues in the design and implementation of supplementary pensions systems.