European Union involvement in ensuring the financial viability of the pension system

Social Protection in the EU encountered many difficulties in recent years as a result of demographic trends, economic recession and high unemployment. Member countries are put in a position to reform social protection systems so that they are financially viable and at the same time to remain effective. To modernize social protection systems of the Member States and their efficiency, the Lisbon European Council set four objectives in this field: promoting social inclusion, development of safe and sustainable pension systems, ensuring a quality and sustainable health care system, making work and providing a secure income. Pension policy represents in many respects the corner stone of contemporary European welfare states. Generations of Europeans have benefited from the implementation of public pension schemes, and crossnational surveys show that there is still population-wide support for the efforts made by European governments to provide adequate income benefits during retirement. However, the reform of pension systems has emerged as a key issue in most European Member States. Reforming pension systems should consider two major objectives, namely: long-term financial viability of systems and ensuring adequate pensions in order to maintain a reasonable retirement income to prevent poverty and social exclusion of older people. While a few countries have recently undertaken major reforms to make their pension systems financially sustainable, in the majority of European countries the reform efforts are still insufficient. While national efforts can now draw support on intensified EU cooperation based on the Open Method for Coordination, this method takes the diversity of European pension design as a given, and much of the reform debate is still limited to fiscal issues at national levels. Every Member State at national level should find its own specific solutions in order to ensure that its pension system is adequately positioned to meet the social protection objectives for which it was established while remaining financially sustainable.