Information document - resolution R.3.: Pensions
Foreword
In the context of the preparation of its 2004 Congress, the Federation wished to obtain an overview of the recent changes which have occurred in pensions systems as a whole and more specifically in those of the public administrations of the Member States of the enlarged European Union.
In the past two years, large-scale trade union mobilisation in favour of solidarity-based reforms of the public sector pension systems has left its mark on Europe from Italy, through France, Germany and Austria and shortly in the United Kingdom.
It is therefore in a very hard political context that this study tries to take stock of the complex developments in the pension systems of public sector employees and civil servants in Europe. It was carried out by the Association CSE-développement, at the request of the European Federation of Public Service Unions (EPSU). This work was drawn up on the basis of information and studies carried out or received by CSED. This information has been updated and supplemented by the members of the Association's network.
This document therefore aims to facilitate the development of an EPSU pensions policy. A first part describes the recent reforms undertaken in Europe. In a certain number of countries, the argument of equity between the private sector and the public sector is put forward to justify reforms which are frequently to the disadvantage of the public sector employees; pension reforms and calling the status of the civil servant into question would appear to go hand in hand. In other countries, the status of the civil servant is not taken into account in the pensions debate.
In both scenarios, and whilst stressing the wide variety of pension systems of public sector employees, the report confirms the trend towards «individualisations» of pension rights in the public sector, that threatens to undermine pay-as-you-go pensions schemes.
The persistent discrimination against women employees, whose pension is far smaller than that of men, exists to varying degrees in all the countries studied. Whilst the objective of gender equality increasingly appears on the trade union agenda, governments are still a long way from making it a national and European priority, in spite of the real risks of the impoverishment of a proportion of pensioners.
In a third section, the focus is placed on the role of the social partners in the pension reforms, both past and present, as well as on the trade unions' counter-proposals. Here too, trade union and social dialogue practices differ from country to country, especially as regards the management of supplementary pensions.
Finally, the last part of the report takes stock of the role of the European Union in the pensions field. According to the subsidiarity principle, the Member States retain competence for pension issues. However, under the open method of coordination, the European Council of Laeken (2001) set common objectives, i.e.:
- financial sustainability,
- adequate pensions,
- modernisation (new forms of employment and equality between men and women).
Although these objectives therefore cover both the financial and the social aspects of pensions, the former seem to take precedence over the latter. The absence of political consensus in the social field and the very limited role of parliament and the social partners in the open method of coordination partly explain this imbalance. At the same time, the mobility of public sector employees requires the harmonisation of the national regulations, whilst the single market exacerbates the demands for competitiveness and leads to risks of undercutting in the social field. Finally, the predictable increase in public spending on pensions comes into conflict with the stability and growth pact.
The tendency of governments to shift a greater portion of the responsibility for pensions of employers and the State to the individual remains a major work zone for the trade unions. This logic gives considerable cause for concern, especially for those on low salaries, the majority of whom are women. The attempts to establish pension funds in the public sector are not really convincing and, seeing what happens when the stock markets collapse, will not alone resolve the question of the financial viability of pensions.
This report indicates that it is a matter of urgency to strengthen the action of the trade unions in order to ensure an extension of pension rights. Faced with the development of supplementary pension schemes in the public sector, the access of all public sector employees to these schemes must be assured, irrespective of their sex, age, seniority or contract of employment.
Whilst it is admissible that the public sector pension systems are also the subject of reforms, it is not acceptable for these reforms to be confined to levelling down between the public sector and the private sector. The interprofessional balance must also, and above all, involve a more active quality employment policy. Increasing jobs would allow consolidation of the pension on the basis of allocation and guarantee a fair level of pension for all, men and women. It would also be a matter of reversing the constant decline of the share of the total wage bill in the wealth produced.
An employment policy associated with better distribution of the national income between employers' contributions and/or statutory pensions and employees' contributions should form the cornerstone for viable solidarity-based pension schemes. More effective consideration of equal treatment of women and men inevitably involves combating inequalities in pay throughout the professional career and reasserting the value of «women's» jobs.
At European Union level, it is not possible to speak of pension reforms without taking account of the need for harmonisation of the social legislation and coordination of taxation in order to limit competition through social undercutting. Otherwise, there would be a high risk of the increase in the mobility of goods and employees forcing a hefty reduction in the redistributive nature of the European social systems.
We hope that this report will provide our affiliates with the keys for analysis with a view to amplifying trade union coordination in Europe on the future of pensions which remains, above all, a question of social justice and political and economic choice.
Carola Fischbach-Pyttel
General Secretary
Introduction
Public employers were the first to assure their employees of some form of security in retirement by paying pensions to enable them to meet their needs when they were no longer able to work. This obligation is considered to be a just return for the service rendered to the State. It is essentially justified by the specific nature of public sector employment. This specific nature has nevertheless been called into question in certain countries (Sweden, Finland, the Netherlands, Italy), where the status of the civil servant has been to a large extent aligned with that of private sector employees.
Pension systems need to adapt to this trend in public sector employment, as well as to the financial challenges facing public pension systems, arising from both demographic (an ageing workforce and greater life expectancy) and economic factors (control of public deficits).
It is in this context that both old and new Member States of the European Union have embarked on a process of reform. In most countries these reforms were undertaken first of all in the private sector and then later in the public sector. They were not easy to implement, as the measures they involve are often perceived as unpopular. Trade union opposition in France, Italy, Austria and Germany has shown how sensitive an issue this is.
The principle of subsidiarity means that European Union Member States have sole competence to legislate in the pensions field. The European Union can only intervene where the objectives of the action envisaged cannot be met adequately by the Member States. However, confronted by the common challenges posed by the ageing of the population, the European Council of Laeken (December 2001) laid the foundations for the open method of coordination. This process is based on eleven common objectives coming under three main headings: safeguarding the capacity of systems to meet their social objectives, maintaining their financial sustainability and meeting changing societal needs.
In order to understand more clearly what is at stake and the consequences for pension systems in the public administrations in Europe, this report begins with a review of the reforms undertaken by national governments, taking account of the parameters used to implement them. Secondly, it examines the role of the social partners and then analyses European Union initiatives in terms of their impact on the future pension rights of public employees.
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