Retirement Income Provision throughout Europe

Europe shows a wide variety of institutions for retirement income provision. Countries orient their systems either towards avoiding old age poverty or towards sustaining the living standard of the gainfully employed. This study compares systems of retirement income provision throughout Europe and uses the 3-pillar model to structure this discussion. European countries use different combinations of statutory systems, occupational pensions and voluntary private annuities. Occupational and private arrangements are more common in countries with a statutory system which targets mainly poverty avoidance. Using all three sources of income, the pension benefit of the average gainfully employed person replaces between 55 and 100 percent of the working income; most of the European countries lie in a more narrow range between 68 and 85 percent. Occupational and private pensions do have future potential in countries having either a high projected deficit in the public pension system (Luxembourg, Cyprus, Slovenia, Belgium, Malta und Slovakia) or high expected cuts in future public pension benefit levels (Poland, Latvia, Portugal, Austria, Romania, Greece, Cyprus and France).