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EU-28

3 May 2018

EU: European Commission pension report assesses the adequacy of future pensions

The European Commission has published its two-volume triennial Pension Adequacy Report. The report analyses how pensions help prevent old-age poverty and maintain the income of men and women for the duration of their retirement. Member States pay more and more attention to sustainable, adequate pensions in their reforms but, according to the authors, further measures will be needed.

The 2018 edition of the triennial Pension Adequacy Report analyses how current and future pensions help prevent old-age poverty and maintain the income of men and women for the duration of their retirement. According to the report, there are 1.9 million fewer older EU citizens at risk of poverty or social exclusion than a decade ago, while the number of older workers in employment has increased by 4.1 million in the last three years alone. Despite these improvements in the situation of the EU’s pensioners, the number of older people that remain at risk of poverty or social exclusion is nearly unchanged since 2013 (the report estimates some 17.3 million or 18.2% of EU citizens aged 65 and over). The risk of poverty and social exclusion in old age increases with age due to the fact that, while needs increase with age, the value of pensions decreases during retirement. More than half of all older people at risk of poverty or social exclusion in the EU are aged 75 or over.

In addition, significant differences between countries and population groups remain. Women's pensions are still 37% lower than men's due to lower salaries and shorter working lives linked to caring responsibilities. Moreover, 20.7% of women were at risk of ‘poverty or social exclusion’ in retirement, compared to 15.1% of men. Similarly, people in non-standard or self-employment often face less favourable conditions for accessing and accruing pension rights than those in standard employment.

The report has two volumes that are only available in English. Volume I is a comparative analysis of pension adequacy in the EU- 28 that examines the current living standards of older people and how they are shaped by pension systems. This volume also provides an overview of recent pension reforms and highlights the gender differences in pension entitlements, the pension adequacy of persons in non-standard or self-employment and the role of supplementary pensions.

Volume II provides a more detailed description of the pension system and pension adequacy in each of the 28 Member States. Every country profile gives an overview of the pension system in the country (Section 1) and the main reform trends (Section 2). Section 3 focuses on the assessment of the current and future adequacy of pensions and related challenges. Section 4 concludes with the main opportunities for addressing pension-related challenges. Finally, every country profile contains tables with background statistics, including the variant cases of the theoretical replacement rates.

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