Economic Governance

The EU economic governance is based on three main blocks:

- Reinforced economic agenda with closer EU surveillance
- Action to safeguard the stability of the euro area
- Action to repair the financial sector

Over the European Semesters since 2011, there have been a broad range of pension-related country-specific recommendations agreed. Relatively frequent elements included:

- Increasing statutory pension ages to reflect changes in life expectancy and align with this for the future;
- Equalising state pension ages for men and women;
- Limiting early retirement and integrating special pension schemes into the mainstream;
- Increasing the employability and participation of older workers, including lifelong learning and active ageing;
- Promoting active labour markets including for older groups; and
- Encouraging private saving.

PensionsEurope's Paper on the effects of Quantitative Easing on pension funds

PensionsEurope calls upon regulators to address the specific effects of both low interest rate environment and Quantitative Easing policies on pension funds. However, we do not question Quantitative Easing (QE) policy as such.

Decreasing interest rates can put funding ratios of DB schemes under pressure and increase the price of annuities for both DB and DC schemes. This can mean lower pension benefits and/or increase in contributions.

Pension funds are by their nature long term investors due to the duration of their liabilities, but are now faced with the effects of short term QE. Therefore national and European regulators need to find an adequate balance between the short/medium term challenging environment and the sustainability of pension promises. 


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