If Elisabet Wilhelmsson were Italian, statistics suggest she would be in her sixth year of retirement. Instead, the 64-year-old Swede teaches high-school history and religion in the southern town of Lund and has no plans to retire until past her 67th birthday.
“I may reduce my hours, or take a little pause. If I am healthy, I could always come back,” she says. The official retirement age of 65 seems to be of little importance to her.
Mrs Wilhelmsson is no exception in Sweden, where more than 70 per cent of people aged 55 to 64 still work. Further south, in France or Italy for example, the figure is under 40 per cent.
As the European Union tries to tackle its chronic public debt problems, the costs associated with ageing have come into focus. Rising life expectancy just as the baby-boomer generation approaches retirement means it is becoming harder to fund today’s system across most of the continent.
The European Commission, the EU’s executive arm, wants to use its new remit for policing national budgets to push governments to change tack on pensions. Reform was “urgently required in some countries as part of current actions to restore confidence in government finance”, it warned in a report published on Thursday.
László Andor, commissioner for social affairs, said Brussels would specifically target pensions in profligate states. “We need to achieve a better balance between time spent in employment and time spent in retirement,” he said.
Although retirement ages have been raised in many countries, the Commission is concerned that these do not necessarily correlate with the age at which workers retire.
Sweden and Italy share a statutory retirement age for men of 65, but the Scandinavians actually stop work on average at 66 – five years later than their Mediterranean counterparts. As a result, Italy spends 14 per cent of its economic output on pensions, double what Sweden does, according to the Organisation for Economic Co-operation and Development in Paris. In many EU countries, public pensions have become the largest single budget item – bigger than health, education or defence spending.
Brussels wants governments to banish “unwarranted” retirement ages, or at least get them to rise in line with life expectancy, curtail early retirement schemes and encourage more companies to hire older workers. Extending the average working life by just a few months can make a sizeable difference, according to Monika Queisser, head of social policy at the OECD.
“Not only is public expenditure lower, but people continue to make contributions to the pensions pot,” she says.
Unions complain that raising the retirement age is unfair, particularly for manual workers who started toiling at 16. They fret that it is also unwise – postponing older employees’ retirement means more young people struggling to get their first job.
The Commission retorts that there is no link between delaying retirement and youth unemployment. The most difficult problem, it says, is to change the mindset of both employers and workers so that working longer becomes the norm.
“Employees need to be willing to learn new ways of working,” says Ms Queisser. “Employers for their part have to be willing to train employees throughout their careers and be flexible. It’s a cultural change.”
Flexibility plays a major part in Mrs Wilhelmsson’s decision to keep working beyond the official retirement age. After four decades in the classroom, her school teaching job is part-time, allowing her to tutor older students at the local university. Both employers are happy for her to change her workload according to her personal needs and health.
Is she not a little jealous of her Mediterranean counterparts, now six years into retirement?
“They have a warmer climate in Italy than we do here,” she says. “I don’t think it would work in Sweden.”
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