AGE Platform | Report on Pension Adequacy: vulnerable pensioners need our attention

While the older population overall faces lower poverty rates than most other population groups, there are big differences between EU member states. The overall risk of poverty for older persons is 14% comparted to 16% for other adults. However, in 12 member states, poverty rates are higher for older persons than for others, and in some countries the differences are huge. Older women are more vulnerable than men to poverty, as they dispose of less retirement income, the pension gap standing at 40%. Effective measures to closing this gap quoted in the report are survivor’s benefits and the recognition of carer’s leaves in the calculation of benefits.

The report also outlines certain risks of current pension reforms: the shift to funded pensions lowers the ability of statutory social protection to iron out gender gaps and inequalities, and higher pensionable ages are a risk to all those who have to stop working due to health reasons.

AGE Platform welcomes the report and calls for closer scrutiny of the situation of specific groups, such as older women or older migrants. AGE was asked to submit a statement to the pension adequacy report, which was annexed to the official report alongside the contributions of employers and trade unions. AGE highlights the cumulative negative effect of some pension reforms on the right to live independently for current and future pensioners. AGE asks member states and the Commission to pay more attention to the gender pay, career and pension gaps, focussing not only on employment of younger women and childcare provision, but also on the labour market integration of older women and facilities to help them reconcile work with care duties. A carer’s leave directive is needed to recognise informal care in the calculation of pension rights.

More attention should be paid to healthy life expectancy, which is below statutory pension age in many member states and declining since 2010. On the consumption side, the adequacy of pensions is put at risk by rising fees that have to be borne by users of health-care and long-term care services. AGE calls therefore for the establishment of reference budgets that can capture the changes in the costs of goods and services that are specifically needed by older persons, in order to better assess the adequacy of pensions in future reports.

AGE is also concerned about certain risks relating to the increasing importance of funded pensions in the form of private, occupational or increasingly even statutory pension schemes. Products to decumulate pensions, such as annuities, are often complex and intransparent in terms of costs. Supplier’s practices should be monitored and assessed to improve this market, upon which the retirement income of many pensioners depends.