This looks into the wider context of the financial and economic crisis, taking into account the already existing demographic expectations and challenges in the EU; especially the state of the diverse EU pension systems and the extra impact of the crisis on already existing challenges.
The briefing paper looks into the wider context of the financial and economic crisis 2008/09 taking into account the already existing demographic expectations and challenges in the EU; especially the state of the diverse EU pension systems and the extra impact of the crisis on the already existing challenges. It is divided into three parts:
· Section 1 describes the differences and similarities between the challenges of the crisis and of an aging population
· Section 2 quantifies the impact of the crisis on funded and unfunded pension systems.
· Section 3 takes a long-run perspective on which pension policies are necessary with or without future crises that are certain to recur in some form or another.
The impact of the crisis on EU pension systems:
Europe features a variety of pension systems. Most importantly, they feature very different mixes between funded pillars (with a capital stock) and unfunded pillars (pay-as-you-go). Many newspapers have claimed that funded pensions have been hard hit by the crisis, while unfunded pension systems have escaped from negative impacts through the crisis. This is not true, and this is an important lesson. As a matter of fact, there has been an astounding similarity in the impact on both funded and unfunded pension systems.
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