Flexible Retirement in Europe
5. Conclusions
Retirement flexibility offers several advantages. It permits the adaptation of the universal rules of a pension system to the vast caseload of personal experiences and preferences concerning working and family lives. Moreover, from the State’s point of view, it can be one of the tools for improving the financial sustainability of the system through the raising of the real retirement age. However, it is necessary that the system contains the appropriate incentives which encourage longer working careers and discourage early departures from the work force. Such incentives must not be too great — under penalty of an excessive burden on the system’s balance — or too small which could result in them being ineffective. But rather they should be led by principles of actuarial neutrality. Moreover, however valuable flexibility is in itself, it must be carefully limited to avoid risks to the fairness of individual pension benefits. Retirement flexibility can be put into practice in various ways strictly linked with each other, i.e. both by means of possibilities of choice of the age at which to arrange retirement — with related actuarial correction to benefits — and thanks to the ability to gradually attain the complete end to work activity through partial retirement plans.
In some cases there are still some obstacles to the complete realisation of the flexibility ideal, especially when it comes to partial retirement. For flexibility in the pension field to become not only attractive for all parties concerned (the State, business and workers) but also effective, organisation of employment must be sufficiently flexible, above all in allowing old people access to part time work. Finally, the obligations imposed, e.g. its being linked to the hiring of new staff also make its adoption less welcome to business.
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