Belgium analysis on pensions

Transcription

1 EUROPEAN COMMISSION EUROSTAT Directorate F: Social Statistics Unit F-5: Education, Health and Social Protection Room Document 2 Working Group SOCIAL PROTECTION 05 July 2012 BECH building Room AMPERE Luxembourg Belgium analysis on pensions Item 5.2 of the agenda 1

2 Objectives of the document: The purpose of this document is to summarize the facts and proposals raised by the Belgium delegate and to present the opinion of other Member States that have replied to the exercise. The WG is expected: The working group members are invited to discuss and to express their views regarding the above mentioned topic and to contribute to the future revision in this respect. 2

3 Belgian analysis on pensions Background: During the ESSPROS Working Group last year (June, 2011), the Belgium delegate was invited to prepare a written contribution about the ESSPROS Pension Beneficiaries module and its correspondent expenditure. After Belgium provided the "Pension analysis" document in April 2012 to Eurostat and after receiving the approval for sharing it to the other Member States, the document has been distributed to the Working Group delegates for opinion end of May Introduction The current paper presents the Belgium delegate's main considerations regarding the pensions and opinion of ten Member States that have answered to our requests (MT, LT, RO, BG, LV, ES, NL, CY, PT, CZ). Within the paper the Belgium delegate presented his negative opinion and limitation on some aspects related to the existing current methodology, some facts representing the Belgium system of pensions and he suggested some possible improvements. Facts and limitations of the current methodology raised by Belgium General assumption Due to the current global economic situation, the subject of pensions is raised very often and the decision making authorities are given high importance to this subject. Due to the sensitiveness of such data the Belgium delegate brought to our attention several aspects related to the content of the methodology and also to the structure of the data within the ESSPROS framework. Methodological issue - Definition of "pension" as an overall concept As it has been stated from the beginning of the Belgium paper, in order to assess comparability between Member States it has been suggested that a common vocabulary should be used and a welldefined structure of the word "pension" should be agreed upon. Belgium expressed his negative opinion concerning the following main points: Lump sums - not to be included and considered as pension- only regular payments that are granted for the remaining part of the life should be kept Disability function: - In some countries when the beneficiaries reach the legal retirement age they are transferred to old age function and in some countries this is not the case. This aspect might drive to comparability problems among Member States. - It is not appropriate to have "means tested" The disability, survivors and, unemployment due to labour market reasons functions-are not considered as relevant for the definition of pension. 3

4 Problem of comparability when using different data sources for other needs like SPC, ISG (SPC looks to the income replacement when retracting from the labour market for age reasons, ISG does not take into consideration the special schemes, like civil servants, public sector workers etc). Including of schemes from different pillars might create problems of comparability as well Structural dimension - Aggregation Belgium expressed its negative opinion concerning the aggregation of expenditure both at horizontal level at all schemes level and also the vertical aggregation mixing the benefits of different nature. At the same time the Belgium delegate suggested that the total benefits item from the Pension Beneficiaries module should be removed. - Dissemination The Belgium delegate expressed his concern related the dissemination of data - as the data is disseminated at all schemes level, and not to scheme level or groups of scheme, benefits from all pillars are to be taken into account and then the compatibility of the needs of the SPC/ISG is considered to be lost. Eurostat comments: At this stage Eurostat has the following comments in relation to the current methodology: - Lump sums: according to the current methodology and in line with the European Parliament and Council Regulation No 458/2007 (Annex II) concerning ESSPROS: "MODULE ON PENSION BENEFICIARIES Categories of benefits covered This module covers data on pension beneficiaries, who are defined as recipients of one or more of the following periodic cash benefits of a social protection scheme: (a) disability pension; (b) early retirement benefit due to reduced capacity to work; (c) old-age pension; (d) anticipated old-age pension; (e) partial pension; (f) survivor s pension; (g) early retirement benefit due to labour market reasons." - Disability to the old age: according to the current methodology stated in the ESSPROS Manual the disability pension is received by a person below the legal/standard retirement age. As a common practice all member states (even if under their national law it is not stipulated) are registering the disability beneficiaries under the old age for comparability reasons. 4

5 The member states comments Country Latvia Malta Comments 2. Latvian legislation determines that only one pension may be granted for a person; however a person can change the type of pension within one month. 3. Against the Belgium proposal to eliminate the item because it is the only way for Latvia to eliminate the DC. Moreover the total number of Pension beneficiaries serves as a descriptive and comparable indicator. 1. Any beneficiary who is in receipt of a pension should be counted as "unique pensioner" (it doesn't matter if the pension is received fully or in part). 2. To record beneficiaries once they start receiving the benefit and NOT when they reach the "legal" retirement. 3. Against the idea of discontinuity for the total sum of pensioners and inclusion of non-contributorybenefits Lithuania 2. In Lithuania there is one general pension scheme (Scheme 10) that is covering the majority of Pension Beneficiaries (5 benefit categories and all 4 functions). Scheme 26 belongs to the 2nd pillar: introduced in 2004 and pensions were paid under this scheme only since NO occupational schemes in LT at the moment. 3. LT considers as relevant and useful to present the total number of Pension beneficiaries as well as the number of pension beneficiaries under the general pensions schemes(s). 4. "Active" pensioners are a relevant concept for LT where all pension beneficiaries over the retirement age can received a pension and a "professional income" at the same time. 5. Not enough to collect information on pensions according to the ESSPROS methodology. Proposal for an inventory of pension systems of Member States (i.e. summarized tables) to present for public access. Czech Republic Portugal 1. Pension= regular/periodic payment. Lump-sum settlement could be excluded. Idea for a research to investigate why people choose lump-sum settlement instead of regular payments and in which rate. In CZ, lump-sum settlement is a benefit within scheme There is not any kind of means tested "pension" benefit and any kind of civil servants scheme in CZ. 3. Transition between disability and old age functions must be done for all countries. 4. Support for a pilot calculation about Indicators on PB to investigate about the different national figures. 1. No problems for calculations of horizontal and vertical totals. 2. Problems of comparability when looking at benefits between different schemes in the same country (i.e. the 3 benefits in old age function). 3. In PT, the disability pension is converted in old-age pension at the time that the pensioners reach legal/standard age of retirement. Moreover the benefit cannot be considered pension because it is given to those who lose work over a longer or shorter time. 4. Comparison between survivors and old age pensions (or survivors and disability pensions) can be solved with the elimination of DC => to obtain a general total of pensioners in the country). 5

6 Cyprus Bulgaria The Netherlands Spain Romania 2. Transition between disability and old age functions is done in CY. More discussions to keep the quality in good standards should be launched. 3. The benefit does not exist in CY. 4. Agree with the Belgium proposal that some benefits (i.e. disability pensions) should not be classified as pensions if the beneficiary may have never worked before => re-examination of several benefits. 5. Against the Belgian's opinion to include in calculations only the schemes with wide reaching coverage in a country. CY is in favour of including supplementary schemes, independently from the number of pension beneficiaries covered since they are still categorized as pensions. 1. To be careful in comparing pension data of different countries. 2. Calculation of averages: not appropriate because it does not reflect the average amount received by a pensioner who can receive more than one pension from different functions and schemes. 3. Lump sums: they represent "severance pay" so they should not be included as pensions (there are some supplements that are lump sums and need to be accounted as pension expenditure). 4. Agree with the Belgium about SPC-ISG work: in BG at "old age" benefit level, there is a combination of two types of benefit. 5. Numbering of schemes to make data more user friendly (scheme 1 in BG is the biggest). 6. Taking into account country specific features of pension provisions would mean additional work. 1. Pension schemes should be mandatory to the total population or at a major part of it. Individuals are obliged to participate in pension schemes, if not that scheme would be an individual one (3rd pillar). 2. Flexibility of the retirement age in Europe. 3. In NL the people who receive a disability or unemployment benefit are stimulated as much as possible to find a job. 4. Proposal to determine the income situation per age group. 2. In Spain, there are not data about PB belonging to the private sector. 3. Retirement age (important to fix comparable indicators). 4. Transition from disability to old age can be done without any problems in Spain where the pension changes the name but the conditions remain the same. 5. In favour of indicators by gender that include information about the pensioners' age. Spain supports also the idea to group PB data by age and type of pension. 1. Pension represents the right monetary return established by the pension decision. 2. Only 1st pillar included in ESSPROS because in the 2nd one there are only contributors and not recipients. Concrete proposals made by the MS Malta: A common solution that avoids many of the qualifications mentioned in the document is to record beneficiaries once they start receiving the benefit and not when they reach the legal retirement age. What matters for political debates, is the number of pensioners and the expenditure disbursed. It is only in academic papers that it is important to qualify the figures used. Netherlands Agencies or countries have their own interpretation of definitions and this could lead to difficulties in comparing the pension data between countries or agencies. A suggestion to avoid these difficulties is to determine the income situation per age group, starting from the earliest retirement age (in some countries 55 years of age). This will also serve the client better, since they can determine what functions they need for their own definition. For example if an organisation considers the function disability and old age as a pension, it can add up these functions and consider it as a pension. But if 6

7 another organisation uses only old age for the definition of Pension, it can use the function old age. Below an example is given of our suggestion: Country Category/Function Age x % has a paid job x % is unemployed x % disabled x % Social Exclusion x % Other etc Lithuania We suppose that for further studies on pensions, it could be useful to compile an inventory of pension systems of Member States and to present for public access, for example, some summarized tables with information on the number and name of pension schemes, retirement age (by gender), level of a pension scheme (general/complementary) and the coverage of each pension scheme in each Member State. Spain We consider that is important to facilitate the collection of data of the indicators always by gender, including information about the age of retirement and to group the data of pension beneficiaries by age and as well as by type of pension. 7