Demographic changes in the coming decades will place increasing demands on our pension systems and public finances. Effective reforms implemented today can help to ensure their sustainability and quality.
Thanks to recent reforms by governments across Europe, public pension spending in the EU as a whole is expected to remain relatively stable until 2060. Nevertheless, there will be large differences in spending between countries.
The European Commission analyses public pension expenditure projections to gauge the size and timing of future changes in pension expenditure and their underlying causes. To do this, we look at:
We use national economic models that reflect the key characteristics of each country's pension system to gauge the size and timing of future changes.
To get a better understanding of the factors driving expenditure increases (population ageing, dependency ratios, employment trends, government policies).
The Commission produces its projections of age-related pensions spending together with national experts in a joint working group of the Economic Policy Committee (EPC).
They are calculated using a uniform methodology for all EU countries (standard population and labour force projections and standard underlying economic assumptions).
The projections are based on current policies but in some cases also take into account well-developed reforms in certain countries that are soon to enter into legislation.
Read more in the Ageing Report 2015.