Union warns over impact of ageing population on pensions

Labour unions have warned that a major demographic shift due to ageing populations in the EU requires the restructuring of pensions.

At a European conference on Thursday, the Democratic Labour Federation of Cyprus (Deok) heard that under current projections the share of those aged 65 and above in 2060 will be 32 per cent – compared to 19 per cent in 2015. Notably, that figure was just 13 per cent in 1960.

“Therefore, countries with low birth-rates and high life expectancy combined with low employment will have the biggest problems,” Deok said in an announcement on the results of the conference.

The knock-on effects of an ageing population impact key aspects of a society, Deok said, emphasising that the economy, its workforce and pensions are some of the most immediately at risk of imbalance.

The union cited a report by the European Commission as stating that encouraging more births and increasing migration will not solve the underlying issues.

Even if migration were to double, the percentage of the EU population aged 65 and above would still reach 29 per cent. And even if births were to rise by 25 per cent the rate of pensioners would still increase to about 30 per cent.

Two ways of combating such challenges are by increasing employment and reducing undeclared work and informal employment, it said.

They also argued for better integration of women into the workforce and for them to be better supported in their balancing of professional and family choices.

To further ensure the sustainability of the pension systems the provident funds should be modernised and be made mandatory for all employers and employees, the union said.

It was also heard that major advances in technology will radically shift and alter the future of jobs and the type of employment which is available. The union said a clear plan is needed in how such alterations will be harnessed so as not to cause harmful disruption.