Active Ageing: the EU Policy Response to the Challenge of Population Ageing

7. New Policy Directions for an Updated Strategy of Active Ageing

Active ageing is a critical strategy for the future of European welfare state and the European social model which need to be integrated with new policy and legal directions. The paper recommends to revise and update it along the following legal and political lines: first, take measures to achieve the Stockholm and Barcelona targets, second, restrict and then abolish altogether MR, third, improve EU Law on age discrimination and fourth, encourage gradual retirement and promote part-time work for older people.
a. Take measures to achieve the Stockholm and Barcelona targets
It is important that the EU in the remaining three years up to the 2010 should increase the pressure to the laggard states to achieve the Stockholm and Barcelona targets and improve the enforcement of the Age Discrimination Legislation. Once these targets are achieved, the EU should proceed further with new targets and reforms for the period 2010 and 2020.
b. Restrict the mandatory retirement ages at EU level
Given the current reform mood of the active ageing policies at EU level, it is likely that EU and its member states will follow a piecemeal approach to active ageing. Therefore, acknowledging this political prospect of the active ageing reforms we recommend a step by step reform of the MR ages.
The recommendation made here is that the EU within the first half of the next decade (i.e. period 2010-2015) needs to introduce a new target: to restrict the MR age before a certain age. In the EU context to restrict MR ages means to increase the MR age limit from the current target of 65 (Barcelona target) to 70 years old. Once this new target is achieved, the EU can go further and remove MR completely, that is, move from the age limit of 70 to no age limits. This approach is adopted by other Western countries that have first, restricted MR and then abolished it altogether (e.g. Norway, only restricted i.e. prohibited before the age 70 but not yet abolished; USA, restricted in 1978, abolished altogether in 1986; Australia, restricted in 1996 abolished altogether in 1999, Meadows, 2003).
c. Remove the mandatory retirement ages at EU level
As we noted above, when the EU achieves the target to restrict MR before the age 70, it can go further and launch a new target to remove the MR age altogether at EU level by the year 2020. The EU can do this by introducing the definition of ‘age’ in the “Employment Equality Directive” (2000/78/EC), which means to define the lower and the upper limit of age. While the EU can leave to the national governments to define their lower limit of age (18 years old or other limits), to remove the MR age it is necessary to remove the upper limit of age at EU level.
The removal of the upper limit of age means to remove the upper limit on protection against age discrimination. As Shepard put it “abolishing MR would be a very good thing”. Those seeking employment over age 65 often have the very skills and experience in high demand but cannot make use of those desirable attributes because of MR (Sheppard, 2006).
e. Retain MR for some universal exceptions
Even in the countries, where MR is abolished, the legislation seems to allow age discrimination in universal cases, that is, in a few selected occupations (e.g., police, firefighters, pilots, traffic controllers) where the safety of the public and co-workers is a prominent rationale for this universal exemption (Sheppard, 2006).
The recommendation made here is that the EU, in upholding the abolishing of the MR ages, it may nevertheless be necessary to make some exemptions where there are pressing public security needs or where such treatment impose undue costs and therefore in these situations the practice of the MR is justified. But even these universal exemptions elicit controversy. For example in Israel, airline pilots are subjected to more frequent testing rather than a compulsory retirement rule (O’Cinneide, 2005). The US Supreme Court decision on Western Airlines vs. Criswell No. 83-1545, where court emphasized that employers would have to demonstrate that the use of age limit was ‘necessary’ and individual assessment was not possible, even where public safety was an issue (O’Cinneide, 2005).
f. Improve the EU law on age discrimination
In light of the weaknesses revealed above the EU needs to amend and improve the provisions of the EU law on age discrimination and the enforcement of these laws.
First, reduce the uncertainty, the ambiguity and the opaque character of many articles of the Directive about the age discrimination. This means to reduce many exemptions from the Directive’s general prohibition of discrimination and to clarify when age can legitimately be used to differentiate between individuals and groups and when not.
Second, provide effective remedies for victims of age discrimination. This means to reduce the complicated procedure (comparator approach, excessive formalism, etc.) though which the victims of discrimination can establish successful claims for direct or indirect discrimination.
The best approach would be either to limit the scope of such legislation to discrimination against those above a particular age (under the US experience the over 40s) or to provide that it was discriminatory to subject a person to detriment on the grounds of their age and thus avoid the need to show a comparator. This is of course compatible with the current EU law as Article 8(1) permits MS to provide a higher level of protection than that required by the Directive (O’Cinneide, 2005).
g. Encourage gradual retirement and promote the part-time work for the older workers
As the population continues to age the continued mass exodus of qualified healthy and experienced workers from the labour force seems out of line with the socio-economic characteristics of an ageing population (Leeson, 2005). Therefore, the International agencies (World Bank, 2001), think-tanks (Geneva Association) and academic analysts (Reday-Mulvey, 2005; Howse, 2006; Emmerson, 2002; Giarini and Liedtke, 2006; Dytchwald, 2006; Varchaver, 2005) are virtually unanimous in the view that later retirement and longer working lives are essential components in any sensible strategy to cope with the fiscal and economic challenges of population ageing.
Therefore, the recommendation made here is that the European Social protection systems must be made more employment-friendly and encourage rather than impede a gradual transition to retirement for the older workers by working part-time for a number of years before complete retirement (Chen and Scott, 2006). Longer life expectancies and improved health conditions would permit this (Giarini and Liedtke, 2006).
Moreover, generally the benefits of part-time work for older people outweigh the cost and the advantages of the part-time work and gradual retirement for older workers are for all parties concerned (Giarini and Liedtke, 2006). Part-time working schedules for over 60s appeal to employees who can enjoy a more individualized balance between work and retirement and leisure and to employers who can exploit very good characteristics that the older workers posses (they are experienced, reliable, hard-working, are effective in their job, display good team work flexibility). These positive characteristics of older workers should be exploited by the employers not only until the age of retirement, but for a longer period. Part-time work and gradual retirement of the older workers also appeal to EU member states governments. Increased economic activity among the older population will also help to maintain general prosperity and provide the govesrnment with more revenues to pay for public goods and services (Howse, 2006). In addition, part-time work can help the governments to diversify the retirement system and to establish a fourth pillar of the social security system which combines income from part-time work, for people wishing or needing to extend their working life with partial pensions after the official retirement age (Reday-Mulvey, 2003). Therefore, what is needed is a pioneer effective programs and strategies to attract, retain and motivate an ageing workforce, including gradual retirement, part-time work and bridge careers.
To sum up this section, all these new policy and legal directions of the EU future approach to active ageing are, politically, financially, socially and legally sustainable. The reforms are supported by the majority of the population and what is most important is that all these reforms are sustainable taking into account that the epicenter of the economic and political power will shift from the young to the old as nations are transformed into a ‘gerontocracy’ (Dychtwald, 2006).

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