|
|
Uniting Over Pensions
By Matt Moore, Associated Press
Europe
April 12, 2006
Worried Europeans Fighting For Measures That Would Keep Plans Fully Funded.
With cheap health care, easy travel and generous retirement benefits, many European pensioners enjoy the good life. But shrinking birth rates and a rapidly aging population mean that seniors face an uncertain future - prompting governments to think hard about how to ward off a looming pension crisis.
Fearful that their governments are moving too slowly to ensure their retirements, many soon-to-be pensioners and younger workers are banding together and campaigning for measures to plug the pensions hole.
Governments from Germany to Britain have decided that one way to ward off a shortfall is to increase the retirement age by two or three years above the typical 65. That's hardly welcome news to people looking forward to a life less taxing.
"My husband and I have been working since we were 15, and here we are at 53 years old being told that we are not going to get our full pensions," said Gaynor Stowers, a technical clerk for Southhampton City Council in Britain. "They should give us what all we've paid into the pension - about 67 pounds [about $117] a month."
Britain has a retirement system based on a small state pension paid to everyone who has worked, supplemented by more lucrative private pensions. But the state pension has steadily lost value because it increases in line with prices, not average pay. Private pensions, meanwhile, are being eroded by higher taxes, stock market underperformance and mismanagement.
Because of that, the Pensions Commission - set up by the government to stave off a funding crisis - has recommended increasing the retirement age to 68 by 2050 and linking payments to earnings, not inflation.
Critics contend that could lead to employers being forced to make contributions to the state pension system - and lead to lower wages and job cuts. Britain's National Insurance system is funded by monthly employee contributions, most of which are used to pay health care costs, with a smaller portion going to pensions.
"I started paying into the local pension when I was 19," said Adrian Jones, 51, a housing development officer for the Birmingham City Council. "At that time, you take the advice of the government for the future - pay into a pension. You never think that they will deceive you and just take it away from you."
Those fears prompted more than 1 million public workers to strike on March 28, shutting down thousands of schools and stopping public transport for the day.
It's a worldwide concern. As the workforce ages and birth rates plummet, there is less money going into pension systems and millions of people looking to retirement. With fewer young people joining the workforce, the postwar generation that is about to retire can't count on those still on the job to keep pensions funded.
In Denmark, the government on April 4 presented its vision for Denmark's generous welfare state in the face of an aging population. The plan included raising Denmark's retirement age by two years, to 67, and raising the starting age for a popular program allowing people to retire with a limited pension from 60 to 63.
"Some people work harder than others. Some have desk jobs, others have more physical jobs," said Frank J. Jensen, a 51-year-old construction worker in Copenhagen.
"Retirement shouldn't be decided by one's age, but whether you're worn out and fit for retirement. People with desk jobs can work till they are 67 or 70 maybe, while I may be ready for it at 55 or 60."
|
|
