This Green Paper takes a life-cycle approach that reflects the universal impact of aging and focuses on its personal implications and broader social impacts. These range from lifelong learning and healthy lifestyles, to financing adequate pensions, or the need for increased productivity and a sufficiently large workforce to support long-term care and healthcare for the elderly.

Some of the aspects analyzed in the reform, include:

1. There is a challenge in maintaining adequate, fair and sustainable pensions in an aging society, and the need for people to accumulate additional savings. However, in the absence of other reforms, the paper points out that the greater number of pensioners and fewer people of working age are likely to lead to higher contribution percentages and lower pension replacement rates, in order to ensure the sustainability of public finances. These developments can place a double burden on younger generations and thereby raise questions of intergenerational justice.
2. The key solution to achieving the aforementioned goal is longer working lives. According to Eurostat’s most recent demographic forecast, the EU’s old-age dependency ratio in 2040 would only remain at the same level as in 2020 if working lives were extended to age 70. Pension systems could favor the prolongation of working life by automatically adjusting retirement ages to reflect longer life expectancy. Measures such as limiting early retirements to objectively justified cases, generally establishing the right to work beyond the retirement age, as well as flexible retirement regimes, can help make pension systems adequate and sustainable.
3. There should be pensions that provide decent standards of living in old age to those who cannot prolong their working lives. This could be achieved, for example, through pension credits, minimum pensions, residence-based pensions and social assistance aimed at the elderly, or also available to them.
4. Ensure that pension systems cover different types of economic activities, for example, expanding access to more types of workers and the self-employed would help ensure their adequacy and taxable base income and mitigate inequalities within the labor market. Since the economy and the labor market could affect the taxable base income, member States may have to rethink the way in which their social protection systems are financed.
5. There should be policies in place to facilitate and encourage participation in complementary pension schemes (for example, the Pan-European personal pension product, which is a voluntary individual pension scheme scheduled to start operating in 2022), complementing the existing PAYGO pension schemes and thereby offering additional retirement savings.

To review the complete report, please download it here.