GOVERNMENTS have been warned they are reforming pension schemes on the basis of unreliable projections and the result will be devastating for the elderly in the future.
A conference attended by representatives of EU states discussed the changes that need to be made to pension policies to ensure countries can continue to afford them as their populations age.
But Anne-Sophie Parent, director of AGE, a European network of organisations representing older people, said policymakers needed better tools to assess the impact of planned reforms on different population groups.
“Reforms are needed but they must be fair and socially sustainable. At the moment policies are developed on the basis of broad unreliable projections that do not take on board the real life situation of millions of workers,” she said.
As more than a million French took to the streets to protest government plans to raise the retirement age from 60 to 62, Social Affairs Commissioner László Andor said with the longer life expectancy, an aging population and the economic crisis, choices will have to be made.
The options are to have lower benefits, higher contribution rates or people working more and for longer. He believed the solution would be a combination of the three but added that working longer and more was particularly viable.
The workforce is predicted to shrink significantly in Europe from as early as 2012. And Mr Andor welcomed the debate generated by the Commission’s Green paper launched in July.
And while Ireland’s workforce is slightly younger than that of most EU countries, so the number of workers to retired people will be higher for longer, Irish private pensions were the worst hit of any country, losing up to 40% of their value.
A recent Economic and Social Research Institute report said poverty levels for vulnerable groups, including the elderly, will increase significantly partly due to cuts in welfare.
Community Affairs Minister Pat Carey said further cuts were likely in December’s budget.
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