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A COMPARISON OF THE PERFORMANCE OF EUROPEAN PENSION SYSTEMS USING A COMPOSITE INDICATOR

L. Mladen

Abstract

Over the past few years, the European countries have reformed their pension systems in order to make them able to cope with the challenges put forward by aging. As a consequence of the reforms, the pension systems have become more complex, the old age income being obtained today through cumulation of benefits provided by more types of pension schemes. Most often the changes were oriented towards ensuring financial sustainability of the system, sometimes forgetting that the purpose of a pension system is to provide adequate retirement incomes, to allow the elderly to maintain a decent living standard after retirement and to have economic independence. In our study we present a comparative analysis of the pension systems' performance in EU Member States based on a composite indicator. The global indicator that we have built has three components: the sustainability indicator, the adequacy indicator and the equity indicator. Each of these three components is obtained by aggregating several individual indicators, to which different weights are assigned. The purpose of this analysis is to identify and provide as example the countries where the pension reform has been a success. Such an analysis could give rise to controversy because each country has different economic, social and political circumstances and has its own cultural heritage. However, we believe that we can still identify interesting aspects and lessons that can be learned.

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DOI resolver: doi.org/10.5593/sgemsocial2017/13/S03.002

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