Adequacy and Sustainability of Pensions
By Commission European
Pensions are the main source of income for older people in Europe, coming mostly from ‘pay-as-you-go’ public schemes. Retired people drawing a pension are a
significant and — due to demographic ageing — a growing part of the EU population (about 124 million, or a quarter of the total population1). European pension systems are facing the dual challenge of remaining financially sustainable and being able to provide Europeans with an adequate income in retirement. The key purpose of pension systems is to protect older people from poverty and to allow them to enjoy decent living standards and economic independence when ageing. Financial sustainability of pension schemes is the indispensable means to this end. Pensions affect public budgets and labour supply in major ways and these impacts must be considered in pension policy. Principle 15 of the European Pillar of Social Rights states that both workers and the self-employed in retirement have the right to a pension commensurate to their contributions and ensuring an adequate income. It states explicitly the principle of equal opportunity between women and men in the acquisition of pension rights.
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