The European Commission (EC) said yesterday that member states needed to raise the retirement age to reflect an increase in life expectancy, warning that failure to do so will strain public finances.
The EU’s employment policy commissioner Laszlo Andor presented a draft proposal, saying that “EU counties should promote longer working lives by linking retirement age with life expectancy, restricting access to early retirement and closing the pension gap between men and women.”
Governments should consult with employers and trade unions on mandatory retirement ages “to see how they could be revised,” the commission said.
Andor also proposed several other policies that could be put into effect – namely schemes to retrain older workers and make supplementary pensions mobile across EU member states.
Although the EU’s 27 member states can still make this kind of policy without the interference of the EU itself, the European Commission (EC), the EU’s executive branch, can make proposals and exert pressure states to reform policies.
The UK Government, among other countries, has already made efforts to raise the minimum retirement age to reflect a generation people that are living longer, as have other EU states such as Belgium. The Socialist candidate for France’s presidency Francois Hollande has made lowering the retirement age from 62 to 60 a central part of his re-election campaign.
CBI Director for Employment, Neil Carberry said that overall, his organisation was pleased with the proposals from the EU, but added that he still had concerns: “[The CBI’s] concerns with the IORP (institutions for occupational retirement provision) Directive remain. We are unconvinced Commissioner Michel Barnier has moved on from his proposal of applying Solvency II-style regulations to pensions, which would be hugely damaging to the economy and job creation.”
“The IORP Directive must place a greater emphasis on growth to better complement the overall direction set out by today’s White Paper, putting pension affordability at the heart of the debate,” he added.