According to the European Commission, the retirement age within the European Union member countries should constantly rise. The Commissions “white-book” includes, that in the pensionable age should be connected to life expectance. Retirement benefits are for one out of four people in the EU the main source of income. Without a stable system of retirement benefits, millions of people could suffer from old-age poverty.
The challenges are the increasing life expectance, low birth rates and consequently a shrinking employed population. Whereas in the year 2008 four earning capable people (15 to 64 years old) came to an older than 65 year old person, this relation will decrease to two to one in 2060.
Thus the Commission calls upon the EU member countries to connect the retirement age to the increasing life expectance of their inhabitants, to restrict the possibility to retire earlier and to equalise the so far shorter work life of women to the one of men. However, the EU Commission is not allowed to force their suggestions in pension-policy to their member states, but only to recommend.
Especially in times of bad economic conditions, pension funds put national households under pressure. At the moment annuity payments account for 10% of the GDP in average, but this amount will rise to 12.5% in the year 2060, the Commission expects.
Although the member countries are facing similar demographic challenges, there partly appear big differences. In Ireland the pension payments equal 6% of the GDP, however in Italy it is around 15%.
The Commission calls on the countries to adjust their labour economics for older people. Furthermore money of the EU social fund should be used to integrate older people into working life.
The following table shows the pensionable age of some countries. On the right side is the statutory retirement age and on the left side the acutal age. People from South Korea together with Japan and also Sweden are working longer than they have to, whereas you can find big differences in many other countries.