The Challenge of Increasing Life Spans for Employment and Pension Schemes: An Open Letter to All Those Who Are, or Will Be, 65

Remaining active: the all-important fourth pillar

The fourth pillar is not just another way of postponing the age of retirement. It involves a change to the organization of the ‘welfare state’ and is based on part-time work (roughly the equivalent of 20 hours per week). We see it as part of a social policy for the recovery and integration of those aged 60 to 65. Part-time work does, of course, also apply to youngsters who combine it with training, to working families, and to those who pursue in parallel a number of different occupational activities.
As an integral component of the four pillars strategy, part-time work reflects the fact that as of age 60 or later, even though we need to remain active, we cannot work as hard as we did at 30 or 40. A new balance has to be found. If tennis players, for example, quit the professional court at 30 it is not because they are ‘old’ in any absolute sense. There is, in other words, an optimum age range for any activity, and this has to be accepted.
The unavoidable current debate about postponing the age of retirement would be much more constructive were part-time work to be given its proper place. As early as 1983, the Geneva Association launched its research programme in this field devoting a number of articles and books to the issue of gradual or progressive retirement.
Our approach to the four pillars concept must be a broad one, even though in some countries the accumulation of income from work with a pension is still illegal, revealing a failure to understand that it is thanks to accumulation that we all of us have our best chance of finding a satisfactory solution to our financial problems. That our total assets are thereafter subject to tax merely ensures that the state or public political authority is able to regulate to achieve social solidarity and justice in the manner it deems most appropriate. But first, let us establish and promote all four pillars so that each of us is given the best possible chance, especially those in the 60- to 80-year age bracket.

If we are going to help the young, then let’s be serious about it

One of the habitual arguments against the fourth pillar is that ‘old’ persons by working later fill jobs that would otherwise be available for young workers. Quite apart from the fact that opportunities for job substitution are not as frequent as many believe, this argument is both specious and misleading: for the young themselves will be increasingly discouraged from working if they have to forego a growing share of their wages in order to finance retirees’ pensions. Moreover, available jobs are to be found above all in those sectors (teaching, tourism, health, research) which suit the over-60s most. Finally, people everywhere are talking about the approaching labour shortage (something that is already happening in some sectors), which will have to be met also by recourse to immigrant labour. This means that there is room for many more in the labour market, for ‘outsiders’ as well as for retirees who should no longer be treated as outsiders by their own communities.

Towards a fiscal system that aims at social progress

Our defence of part-time work for the 60- to 80-year-olds does, however, call for additional comment and qualification. First, the seniority principle at work can no longer be rigorously applied: it would be pointless to expect at the age of 65 to be able to continue up the ‘career ladder’ as one did before retirement, especially in middle- or senior-grade jobs, or to expect necessarily to be earning half one’s final salary or more, except possibly if one’s holding a key position in management. Let us not forget: the fourth pillar is very much part and parcel of a social strategy of which all four pillars are essential components. This will dovetail with the financial interest of those willing to employ you were it not for the prohibitive social costs involved. What is more, after 65 you won’t be having to contribute, or if you do it will be much less, to your first- and second-pillar pensions. There have to be fiscal adjustments as well. You will, after all, be taxed on your global income which will include your first- and second-pillar, frequently partial, pensions, other income as well as your fourth-pillar earnings.
And all parties stand to gain: the state, those with work to offer, and especially you yourselves who in the long run achieve greater financial security, greater social satisfaction and, at the end of the day, better health. For freelancers or the self-employed, the issue of an age limit for retirement is already much less acute. The proportion of freelance work will doubtless increase, due to the specific stimulus of the four pillars system, with a full range of mixed options between salaried employment at one extreme and full self-employment at the other.
Remunerated part-time employment, however, is by no means the only kind of productive work in existence. Voluntary work is catching on everywhere. It is high time, indeed, to develop economic indicators to reflect the extent to which this type of work contributes to national wealth. Voluntary and remunerated work is becoming increasingly interdependent, it is frequently complementary and on occasions poses an economic dilemma: should we, for example, build more crèches and/or promote care of children in the home? Unfortunately, our somewhat distorted traditional economic thinking tends to approach everything in purely budgetary terms. In fact, however, in growth sectors like training, health, tourism, cultural pursuits and so forth, voluntary and remunerated work frequently combine in different ways, and our tools for economic analysis need to take greater cognizance of this fact. Such recognition will only serve to increase the job satisfaction of those working in the voluntary sector and so encourage them to further efforts. And if in our societies money is essential, it is even so absurd to suggest that only those things which are wage-earned or paid for are of any real value. But that is precisely what happened during the first phase of the industrial revolution when women’s work in the home and fields was suddenly devalued. It is high time there was a more complete inventory of all activities contributing to the wealth of nations.
And one consequence of proper recognition of the economic value of voluntary work would be the use of economic incentives (tax breaks and modest subsidies) to encourage it.
So, our fourth pillar could well include voluntary work. Nevertheless, as an essential component of our four pillars system, it must be made to contribute directly or indirectly to our financial equilibrium. It is also clear that for the more affluent among us the problem of fourth-pillar earnings does not really arise. But artistic and cultural pursuits, friendship, billiards and cards, travel and hobbies of all kinds have always constituted a very active non-remunerated fourth pillar for many people making them fully-fledged members of what is often termed the ‘leisure society’. Indeed, in a number of areas, leisure pursuits themselves can be, and frequently are, productive activities. All agreeable, truly engaging work provides pleasure, often keener than that to be derived from leisure pursuits proper. Whatever the case, the same question applies to any activity: does it enhance our personal well-being and add to the wealth of society?

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