The reforms introduced in European pension systems have placed unnecessary burden on younger population.

Experts opine that post-Covid reforms should focus on sustainability and equity.

Linda Yueh

Linda Yueh, economist at the University of Oxford, shared an article on the equity of pension systems in Europe in the post-Covid era. The ageing population in Europe resulted in the implementation of several reforms to ensure the sustainability of the pension system. Major reforms, however, were implemented following the 2007-2008 global financial crisis and the European debt crisis. The reforms improved the structure of the pension systems and provided enhanced protection to low-income retirees.

However, some of these reforms lost steam as the effects of the global financial crisis and the European debt crisis waned. Furthermore, the Covid-19 pandemic exacerbated the sustainability risks of the pension systems and disproportionately affected the younger and working age populations compared to retirees. The article highlighted the need to rethink the existing design of the pension and welfare system to ensure sustainability and equity of pensions.

Reforms in the future should focus on attaining sustainability of the pension system without burdening the younger generations. The reforms should be framed in such a manner that they strengthen the link between contributions and benefits. Furthermore, targeted pensions should be carefully designed in case of earnings-related pensions.

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