EU aims to develop scheme encouraging “better opportunities for older workers” with tax incentives for those involved
This year, the EU is observing the European Year for Active Ageing and Solidarity between Generations. In recognition of this, the organisation recently released a White Paper detailing the proposed measures the EU intends to take to protect and maintain safe pension schemes for older workers and retirees. Within it, the EU outlined the role the European Social Fund would take in protecting retirement plans.
The White Paper proposes introducing several initiatives to protect existing pension plans and create sustainable pension schemes for the future. The proposal includes creating “better opportunities for older workers… by using the European Social Fund to bring older workers into work,” developing “complementary private retirement schemes” through “tax and other incentives” in member states and improving the “safety of supplementary pension schemes” for current participants.
According to the European Commission, the goal of the White Paper is to “create the right conditions so that those who are able can continue working, leading to a better balance between time in work and time in retirement; to ensure people who move to another country can keep their pension rights; to help people save more and ensure that pension promises are kept and people get what they expect in retirement.”
The EU’s role in protecting pensions
During the presentation of the paper, EU Commissioner for Employment, Social Affairs and Inclusion, Laszlo Andor, said, “Ensuring adequate pensions for the future is possible if we follow through on our commitments to reform. The impact of ageing is upon us, the baby-boomers are retiring and fewer youngsters are entering the labour market. But it isn’t too late to meet these challenges.”
While the EU cannot intervene in individual corporate pension schemes, it can improve the economic environment for maintaining pensions by drafting legislation that makes it easier for the internal market to function and provide financial support for older workers and retired individuals. As outlined in the White Paper, the European Social Fund will also have a part in accomplishing these initiatives. The ESF is the main organisation through which the EU encourages employment in its member states.
Since pension schemes are a major part of employment trends, the ESF will be working to improve the ability of older workers to find suitable work in their home countries by funding initiatives to improve workers’ job skills. Workers of advanced age may also find it hard to secure available employment due to discrimination. Part of the ESF’s charge is to prevent social exclusion by working toward the “inclusion of disadvantaged workers.”
Another task of the ESF is to help young people find available employment, which has been particularly difficult in the current economic climate. The falling number of young workers has been a major catalyst for the pension crisis in the EU and abroad, since taxation generated from these workers’ incomes is often used to provide funding for retired employees.