What pensions can we hope for?Que pensões podemos esperar?

José Veiga SarmentoChairman of APFIPP

Lisbon, 28th September 2018

A problem on Pensions?

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“What pensions can we hope for?”“Que pensões podemos esperar?"

Sustainability Adequacy Demography Public Finances Private Pensions

Really?

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“What pensions can we hope for?”“Que pensões podemos esperar?"

Do we know what is the problem? Tons of studies, papers; Thousands of Conferences; Daily media commentaries, TV talk shows, press; And from the EU: Ageing Report.

“What pensions can we hope for?”“Que pensões podemos esperar?"

What info has the EU Ageing Report 2018 brought to Portugal?

Population 2016 2070 Var.Millions 10.3 8.0 -22.3%Over 65 / (20 - 64) 35.0% 72.8% +37.8%Total dependency ratio (< 15 ; > 64) / (> 15 ; < 64) 53.6% 89.7% +36.1%

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“What pensions can we hope for?”“Que pensões podemos esperar?"

What are the solutions for the Pensions problem? The State takes it all

Retirement at 100-years of age

Increasenatality

Migration from DB to DC

Notional accounts

Auto-enrolment And… Tell the truth!Increase savings

Protect savings

According to IPE magazine (September 2018), across Europe there are themes thatappear to be running in parallel in several countries:

Introducing automatic enrolment; Implementing defined contribution (DC) reforms; Addressing defined benefit (DB) challenges; Raising default retirement ages.

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“What pensions can we hope for?”“Que pensões podemos esperar?"

Pensions: What is going on in Europe?

European Union proposal for a pan-European Personal Pension Product (PEPP)

2017/0143 (COD) – 9 September 2018

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“What pensions can we hope for?”“Que pensões podemos esperar?"

(a) Old age pensions constitute an essential part of a retiree’s incomeand for many people, adequate pension provision makes the differencebetween a comfortable old age and poverty; it is a precondition forexercising fundamental rights laid down in the Charter of FundamentalRights of the European Union, including in Article 25 on the rights of theelderly, which states: The Union recognises and respects the rights of theelderly to lead a life of dignity and independence and to participate insocial and cultural life.

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“What pensions can we hope for?”“Que pensões podemos esperar?"

(b) The Union is facing several challenges, including demographicchallenges because of the fact that Europe is an ageing continent. Inaddition, career patterns, the labour market and the distribution of wealthare undergoing radical changes, not least as a result of the digitalrevolution. At the same time, it is increasingly clear that national securitysystems are not adjusted to a globalised knowledge economy with openborders, labour mobility and migration. Too many people are not or areinadequately covered by the traditional national pension systems,including, inter alia, women, young people, migrants, low-skilled workers,self-employed workers and workers with atypical contracts.

European Union proposal for a pan-European Personal Pension Product (PEPP)

2017/0143 (COD) – 9 September 2018

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“What pensions can we hope for?”“Que pensões podemos esperar?"

(c) A substantial part of old age pensions is provided under publicschemes, so that there is a direct connection between nationalpension systems and the sustainability of public finances.Notwithstanding the exclusive national competence regarding theorganisation of pension systems as determined by the Treaties, incomeadequacy and financial sustainability of national pension systems arecrucial to the stability of the Union as a whole. By channelling more ofEuropeans’ savings from cash and bank deposits to longer-terminvestment products, such as voluntary pension schemes, the impactwould therefore be beneficial both for individuals (who would benefit fromhigher returns and improved pension adequacy) and for the broadereconomy.

European Union proposal for a pan-European Personal Pension Product (PEPP)

2017/0143 (COD) – 9 September 2018

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Part One: Marius LüskeOECD Pensions and Population Ageing, Social Policy Division

The Pensions Landscape and Challenges in European and OCDE Countries

Joanne SegarsPensionsEurope and British Pensions and Lifetime Savings Association, Former Chairwoman

Auto-enrolment, a British Solution for a European Problem?

Heribert KarchMetallRente Managing Director and Chairman of the German Association for Occupational Pension

Building Savings through Collective Agreements: a German View10

“What pensions can we hope for?”“Que pensões podemos esperar?"

CONTACTS:R. Castilho, nº 44 - 2º Andar, 1250-071 Lisboa

Email : info@apfipp.ptTel. : 21 799 48 40