Retirement age must be raised, EU says

[Watchman]

Retirement age must be raised, EU says

RTE
July 6, 2010

European governments must consider raising the retirement age in their countries to ease pressure on public finances and prevent the explosion of their pension systems, the European Commission has said.

Weak growth, ballooning national debts and higher unemployment ‘have made it harder’ for all systems to make good on pension promises, the Commission says in a document to be presented Wednesday.

‘Ensuring that the time spent in retirement does not continue to increase compared to time spent working would support adequacy and sustainability,’ says the ‘green paper’ on pension systems.

‘Prolonging working lives to reflect continuous gains in life expectancy over time would bring a double dividend: higher living standards and more sustainable pensions,’ the Commission says.

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[Watchman]

EU urges governments to raise retirement age
Posted: 08 July 2010 0319 hrs

EU Employment, Social Affairs and Equal Opportunities commissioner Laszlo Andor



BRUSSELS : European governments need to raise the retirement age because workers are living longer and their pension systems could implode, the European Commission said Wednesday.

The European Union's executive arm formally launched a debate already raging in several EU countries that are planning unpopular measures to bring down huge public deficits and keep their pension systems afloat.

"The number of retired people in Europe compared to those financing their pensions is forecast to double by 2060 -- the current situation is simply not sustainable," said EU social affairs commissioner Laszlo Andor.

"The choice we face is poorer pensioners, higher pension contributions or more people working more and longer," Andor said at the official presentation of a "green paper" on pensions.

Weak growth, ballooning national debt and higher unemployment "have made it harder" to make good on pension promises and "more urgent" to reform them, the commission paper says.

In the past 50 years, life expectancy in the European Union has risen by about five years and could increase by another seven years by 2060, the commission says.

At the moment there are four working-age people for every person over 65 in the 27-nation EU. That ratio will drop to two for every person over 65 by 2060, the commission says.

On average, Europeans retired at the age of 61.4 in 2008.

This compares to 65 years for workers in the United States and 70 years in Japan. In the 31-nation Organisation for Economic Cooperation and Development, the average retirement age for men is 63.5.

Andor denied "unfounded rumours" that he was calling for the retirement age to be raised to 70 in Europe.

John Monks, general secretary of the European Trade Union Confederation, said the commission's proposal was "unrealistic".

"Where is the evidence that employers want to keep older workers in work?" Monks said in a statement.

"We know the life expectation is rising but see no evidence that a higher age of retirement would be matched by employers developing workplaces which encourage older workers to remain at work," he said. - AFP/fa