The pension sector will play an “Important role” in addressing the challenges posed by an ageing society, according to European Commission vice-president for democracy and demograophy, Dubravka Šuica.

Speaking at the PensionsEurope annual conference held online today, 9 June, Šuica spoke widely on the challenge of an ageing population and the commission’s recent green paper on ageing.

“We need a forward-looking reflection on the impact of ageing and policy alternatives inside the European Union. To address the challenges, a firm commitment and also engagement of young and older people is needed. We need to foster intergenerational solidarity and responsibility within ageing policies. The pension sector will play an important role in addressing the challenges facing our society and economy,” she said.

She said Europe needs to look at a "novel way" to make its policies "fit for purpose" in an era of major change and challenges.

"As we fight to protect lives and livelihoods during this pandemic we must not lose sight of a remarkable development; never before have so many Europeans enjoyed such long healthy lives. The green paper takes a life cycle approach and reflects the universal impact that ageing has on all generations at stages in life."

Furthermore, she said the title of the green paper, Green paper on ageing: Solidarity and responsibility between the generations, highlights the importance of addressing intergenerational fairness.

The report highlights the long-term economic and budgetary implications of an ageing population and shows how the total population in the European Union is expected to shrink. The green paper also asks about pension adequacy, pension sustainability and supplementary pensions.

"Another important concern is how to ensure pension adequacy for those who spend large parts of their working lives in unremunerated work; this leads from a pay gap to a pension gap. Too many women, especially older women, remain at risk of poverty.

"We need to consider carefully, the risk, redistribution and fairness aspects of pension systems. This is a question of intergenerational fairness. Pension systems can and do help to address these challenges. Pensions systems also need to adapt to a flexible and mobile labour workforce; this could help mitigate inequalities in the labour market if expanded to different types of economic activity, including non-standard workers to the self-employed," she said.

In addition, Šuica said she was delighted with the progress of the pan-European personal pension product (PEPP), noting that the draft regulations were published in March this year.

“The remaining two delegated, and one implemented act, have just been published. This means that PEPP regulations will start to apply on the 22 March next year. The first PEPPs should be on the market around that time – so March next year.”

She also noted that a review of the IORP II Directive is “envisaged over the coming few years”.

“The commission is still at an early stage of preparation on the review, they would be glad to hear your ideas and proposals related to this review.”

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