By Martin Banks - 9th November 2011
A conference in parliament was told that EU action is "urgently needed" to tackle a crisis in Europe's pension systems.
Polish MEP Danuta Jazlowiecka, who hosted the debate on Wednesday, said there were "huge disparities" between what people should be saving for their retirement and the amounts they are actually saving.
She pointed to estimates showing that by 2060 there will be just two persons of working age for every person in retirement.
This compares with four people of working age for every person in retirement at present.
The deputy, who has played an active and instrumental role in developing the EU policy debate on pension reform, said the economic crisis and an ageing population had created a "great challenge" for Europe's pensions system.
Jazlowiecka said that as a result Europe we are facing a big 'pensions gap' of around €1.9 trillion – the difference between what Europeans have saved for their pension and the amount they would need in retirement.
"However, without educating people and raising their awareness about saving options, reforms such as increasing retirement age or introducing incentives for private pension schemes won't be enough," she added.
Ewa Borowczyk, of the Polish permanent representation to the EU, said that demographic challenge and tackling age discrimination in the workplace were among the main priorities for the current Polish presidency of the EU.
This would also be "taken up" by Denmark and Cyprus, the two other countries involved in the current EU presidency trio, said the official, who added that the overall aim was to create an "age-friendly" environment in Europe.
This involves, she suggested, "keeping people healthy so as to enable them to work longer".
Anne-Sophie Parent said a key consideration, emerging from the consultation discussions and expected to be included within the commission's pensions white paper, was how to make pension systems more transparent and accessible to consumers.
Parent, secretary general of AGE Platform Europe, said that many people currently feel "totally disconnected" when it comes to pensions issues.
She said, "We know what some of the solutions are, such as people working longer, but these are not enough."
Parent also raised concern about the "gender gap" in pensions systems, with women traditionally surviving on less in retirement than men.
"There is already a gender gap in incomes and we are seeing the gap in pensions between the sexes increasing as well."
The debate was organised by the Parliament Magazine in association with Aviva, one of the world's largest insurance groups, which recently published a report, 'Mind the gap: Quantifying Europe's pension's gap'.
Igal Mayer, CEO of Aviva Europe, told the debate that this was an attempt to model the levels of pension under-provision at European level.
Mayer said the report issued a number of 'calls to action' to national and European policymakers, including a recommendation to develop integrated annual pension statements.
He agreed with Parent about the need for increased and improved public information, awareness and education about pension systems, saying, "I have worked in the industry for 30 years and have to admit that it is incredibly complex. Thing are certainly not perfect.
"There is also a huge gap between what people understand about pensions and what they need to know. It is only via education and information that we can bridge this gap."
Mayer also warned that, with an ever-ageing population, there was an increased risk of people actually outliving the savings they have set aside for retirement.
"Another problem is explaining the difference between banks and the insurance industry. This, I think, is at the crux of the debate."
