Conclusions of the Joint Report by the Economic Policy Committee and the Social Protection Committee on "Progress and key challenges in the delivery of adequate and sustainable pensions in Europe" were on the agenda at the Ecofin Council held in Brussels on 17 November. Ministers approved a report on the sustainability of retirement pensions in view of ageing populations and following the economic and financial crisis.

The Economic and Financial Affairs Council underlines the long-term challenge of ageing populations for the sustainability and adequacy of pensions, challenge which has been aggravated by the current economic situation.

The Council considers that, given the increase in longevity, the key component of pensions reforms will necessarily be the extension of working lives and increase in the effective retirement age. Accompanying labour market measures will certainly also be part of the reforms as a way to ensure the absorption of more people working longer into the labour force. In this scope, although many recent pension reforms have made benefits on the ability of labour markets to provide opportunities for longer and less interrupted contributory careers, the Council recalls that further reforms will still be necessary. These were some of the elements at stake within the public debate launched in July by the European Commission whose deadline was just a couple of days before the meeting of the Ecofin Council.

In Council's view there are three basic elements which will be required to meet this long-term challenge:

• Reducing debt at a fast pace,
• Raising employment rates and productivity; and,
• Reforming pension, health care and long-term care systems.

Situation such as those of older workers, immigrants and women in particular represent a huge untapped resource that needs to be better activated including through appropriate changes to gender and age management in work places and labour markets.

Working lives extension and Private pension systems

The Council underlined that extending working lives by reducing early retirement and raising the effective retirement age, would improve both sustainability (by improving labour force participation and delaying pension takeup) and adequacy (through the accumulation of greater pension entitlements).

Regarding private pension, the Council considers that its role, design and performance should be further reviewed and some changes may be required in the way these schemes operate, in order to improve the safety and efficiency of benefit accruals through better risk mitigation, enhanced capacity for shock absorption, clearer information about risks and returns of different investment options and more efficient administration.

In light of the Joint Report, the Council emphasises the need to consider pension policies in a comprehensive manner using existing EU level policy coordination frameworks and taking into account the many interlinkages between labour markets, social protection systems, financial market policies, and other relevant policies.