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FRDB Fondazione Rodolfo Debenedetti

The Commission Should Ensure the European Citizens about the Long-term Sustainability of the European Pension Systems

An Appeal to President Prodi

28 February 2000

The Fondazione Rodolfo Debenedetti, led by its Scientific Director Tito Boeri and together with Axel Boersch-Supan (Director of the Institute for Economics and Statistics - Universitaet Mannheim), Agar Brugiavini (University of Venice), Richard Disney (University of Nottingham) and Franco Peracchi (University of Rome "Tor Vergata") promoted an appeal to the President of the European Commission, Mr. Romano Prodi, in order to ask the Commission to inform European citizens about the sustainability of the European Pension Systems.

The appeal was undersigned by more than 70 European economists .

In December 2001, the Fondazione Rodolfo Debenedetti informs the undersigners of the Appeal about the development of the initiative with the following note:


 

This note is to inform you on follow-ups to the Appeal to President Prodi "The Ec should make sure that European citizens are informed about the Long-term sustainability of their pension systems". As you may recall, the Appeal made a strong case for: (1) providing a framework for harmonising statistical information and data provision across members states in the evaluation of the costs of getting old and (2) carrying out a thorough investigation of the possibility of developing a rich longitudinal study on ageing in Europe. We are receiving some feedback on both issues.In the last few months, the issues raised in the appeal have been taken up in several official documents, hopefully preparing the ground for decisions going in the direction envisaged in the Appeal.

Reactions to the Appeal

Here are a few quotations of documents making directly or indirectly reference to the Appeal:

"The progressive ageing of our populations compels us to rethink the conventional concept of a three-stage life cycle of education, employment and retirement. As the vitality of our societies increasingly depends on active participation by older people, we must foster economic and social conditions, including IT-related developments, that allow people of all ages to remain fully integrated into society, to enjoy freedom in deciding how to relate and contribute to society, and to find fulfillment in doing so. The concept of ‚active ageing´, as articulated at the Denver Summit, remains our guiding principle in this endeavor." As one of the means to achieve this goal the communiqué seeks to: "increase relevant cross-national research, including comparable longitudinal surveys." (Communiquè from the June 2000 Okinawa G-8 Summit )

The EC Report on "The Future Evolution of Social Protection from a Long-term Point of View: Safe and Sustainable Pensions" disclosed in October 2000, suggested to "examine the relevant Community-wide statistical surveys with a view to ensuring that social protection issues in general and pension issues in particular are adequately covered". It also called for "harmonised data sources and hypotheses" in projecting public pension expenditure outlays". It was stressed that "Wherever possible, the approach should use longitudinal data taking into account all the related dimensions (demographic, economic, employment, social) and the interactions between them."

The report by the EU Economic Policy Committee prepared for the 7th November 2000 meeting of the ECOFIN ministers clearly took on board the main point of the Appeal: i.e. providing more and better information on the cost of getting old.

The OECD Report on "Reforms for an Ageing Society", prepared for the Ministerial meeting of 11th and 12th November 2000 clearly makes the point that to provide for an ageing population has been in the minds of policy makers for the last decade. It adds that the longitudinal studies existing in the US (particularly the Health and Retirement Survey- HRS) are the essential concrete scientific basis for discussion about tax policy and welfare programmes reforms.

Actions following the appeal

A group of promoters is making research on the feasibility of a European longitudinal study tailored on the model of the HRS available in the US. The initiative is called HARE - Health, Ageing and Retirement in Europe and the aim is to stress the importance of the different issues raised by an ageing society (health issues, sociological and economic issues, implications of policy) all of these requiring fresh, detailed and statistical information at a micro level. Most importantly these different aspects cannot be analysed in isolation: the strength of this project relies on the effort to look at them jointly.One of the first concrete steps on both objectives (harmonization of information and new data provision) was a meeting held on the 29th November 2000 in Brussels, where a group of the promoters (the HARE group) presented their proposals to representatives of the European Commission. Representatives of the ECFIN, of the EUROSTAT, of the DG-EMPL, of the DG-FSU and of the DG-RTD attended the meeting.

The important role played by the availability of good quality information on public pensions was confirmed during the meeting, particularly in the light of the ongoing reform process concerning many European Countries. The starting point concerned steps to improve measures of public pension expenditures both by providing an estimate of the existing pension liabilities along with flow-based measures and by implementing stochastic forecasting techniques. Coordinating the assumptions underlying the basic statistical models between States was also regarded as an important issue. Furthermore, a fruitful discussion took place on the feasibility of a longitudinal study targeted to the elderly population. Representatives of the Commission provided valuable comments on the scope and the format of such a longitudinal survey at the European level. They also gave suggestions and support for the development of this specific proposal.

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