Tuesday, July 13, 2010

Europe Tries to Change Pension Provisions

Many European Union members will try to change their pensions during the next few years. Most want to increase the retirement age to respond to increasing life expectancy.

French news reports have fixed on the daily struggle between the government and many of it citizens. In mid-June, the government unveiled its planned overhaul of the pay-as-you-go pension regime. It claimed that without major changes the system would run up deficits of 100 billion euros ($134.2 billion) by 2050. To avoid this cost, the government wants to raise the retirement age from 60 to 62 years. In reaction, French labor organizations mobilized a nationwide strike. Hundreds of thousands of workers took to the streets to protest. But the government announced that it would stick to its plan.

In Germany, the current retirement age is 65 years. The government wants to raise mandatory retirement age from 65 to 67 years. Between 2012 and 2035 the initial retirement age will go up by one month a year. The government also intends to enhance job prospects for older employees through a program called, “Initiative 50 Plus.”

In the United Kingdom, the Guardian (June 23, 2010) disclosed that the government had decided that “The state pension age for men was going to be raised to 66 as early as 2016.” Moreover, the government wants to raise the retirement age to 68 years to "be fair to the next generation of taxpayers." Women are already experiencing a gradual increase in their state pension age from 60 to 65 years by 2020.

Spain faces one of world’s most severe demographic challenges. The retirement age is currently 65 years for both men and women. The Socialist government adopted legislation to raise the retirement age to 67 years .The reform will be introduced gradually, beginning in 2013.

Under significant pressure from other European countries, the Greek government introduced pension system changes to reduce its debt. Currently, the retirement age is 65 years for men and 62 years for women. Soon Greek women’s retirement age will go to 65 years. In addition, the planned Greek changes would eliminate most early retirement schemes, merge pension funds and cap auxiliary pensions.

What are your worries at your age about retirement? What do you want for your support, for your children and grandchildren? Where does your government stand in allocating sufficient monies for its citizens’ retirement?

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