Retirement at 70 in the EU? “Countries have different life expectancies”, says an expert

Uniform retirement age at 70 for the entire European Union does not make sense, believes Jorge Bravo, a specialist in the area of ​​Social Security.

The Vice-President of the European Commission for Democracy and Demography said this week in an interview with Renaissance, that “if we do nothing, the retirement age in the Union should be 70 years old”.

The interview with Dubravka Šuica was analyzed under a magnifying glass by Jorge Bravo, with published works on the sustainability of Social Security and professor of Economics and Finance at Universidade Nova de Lisboa, who starts by contextualizing this idea that the retirement age advances to 70 years in the European Union.

“I believe that 70 years will be a reference value for the European Union as a whole, which will then have different nuances between the different countries that make up the Union, not least because life expectancy is not common among all of them.”

“I think the signal that the commissioner wants to give is that with the increase in longevity and the difficulty in financing the pension systems that almost all work on an apportionment basis, that is, the active workers finance the pensions of those who are dependent, the systems cannot survive financially without transfers from the State Budget. As this puts pressure on public finances, I believe that the signal being given is that the increase in life expectancy must be accompanied by an increase in participation in the labor market, while life expectancy continues to increase as it has so far, it is it is natural for us to move in that direction, ”says the expert.

Jorge Bravo stresses that there will be, in this plan, a Europe with different rhythms. In some countries, raising the retirement age to 70 years can happen in the short term, in others only until 2050, even because there are different ways of calculating the old-age pension.

“Retirement age is one of the parameters of the system, like others, in the way of calculating old-age pensions, how much it contributes each year to retirement, and therefore countries have different mechanisms, in some of them the retirement age and the pension itself is calculated in an actuarial way, there is a strict relationship between what is contributed over the life cycle and what is going to be received in old age, it is a parameter that results automatically. In others, as in the case of Portugal, we have a formula in which for each year of contribution, with limits, there is an additional for the pension. ”

“I believe that the idea of ​​having a common age is very premature, not least because countries have different life expectancies. In Eastern bloc countries, life expectancy is still substantially below the European Union average. Portugal is one of the countries with the longest lifespan, but there are countries like Romania that have a substantially lower life expectancy and, therefore, it would be very penalizing for these countries to impose such a high retirement age ”, he says.

In the interview he gave to Renaissance, the Vice-President of the European Commission for Demography underlines that the pandemic has accelerated the need to respond to an aging population, both in terms of Social Security systems, and to correct the weaknesses now detected in Health systems.

“What we realized is that the health systems themselves had a lot of weaknesses, so there will certainly be a major effort by European countries to strengthen the public health system, and this will have positive effects on increasing longevity, now , this will also have to be reflected in what is the desirable participation of more people in the labor market until an older age ”, says Jorge Bravo.

But he stresses that “it is legitimate for society, and for workers themselves to aspire to greater longevity to be associated with a longer period of participation in the labor market, without leaving aside the natural objective that they have to have a period of their life in which they enjoy a social pension, in this case a retirement pension, to be able to dedicate to other activities ”.

It is also at this point that the Commissioner addresses, in the interview to Renaissance, the drop in birth rates, stressing that raising the retirement age will not be enough, it is necessary to bring more people into the job market to ensure the sustainability of Social Security. The Vice-President of the Commission points out how to increase the participation of European women in the labor market.

Professor Jorge Bravo agrees, but says it is not enough. Once this limit has been exhausted, it will be vital to reorganize migration policies, taking into account the qualification profiles that are suited to the needs of the European Union, in terms of employment.

“We have two dimensions here. The first dimension has to do with greater participation in the labor market. I believe that the example you set regarding the greater participation of women has to do with the fact that we still try, within the working age population in the European Union, to have a greater participation in the labor market and, finally, it has has been increasing in almost all countries, not only in women, but also in people of older ages, but there is still scope to increase the active population through greater participation in the labor market. ”

“This is one of the dimensions, but it has limits. Once this limit is exhausted, we have to look at the issue of migration policies and I believe that it is vital that there must be migratory flows and that they are already running regularly in most European countries, the question is how do we do it ”, he warns.

“There are countries that have had coordinated and concerted migration management policies for decades and it is often not the number of people who are accepted or not accepted, but the qualifications profiles that are suited to what the EU needs are in terms of labor market and skills. It is evident that it is not enough to open the door wide open ”, he concludes.

Source: Renascença – Noticias by

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