After some great meetings in Denmark I made my way to The World Pension Summit in The Hague. It was a fascinating insight into the inner workings of the European pension system - the concept of solidarity in the design of these systems is a reoccurring theme. I am worried that the more we focus on moving away from the social pillar, the more we loose sight of this progressive ideal.
In Finland for example, they hold dear to the seemingly impossible defined benefit scheme, they speak of ideology in the same sentence as investment returns - we don't do this in Australia. In Finland, if you contribute to the country through work (including periods of leave from this work) then you earn rights to a pension. Doesn't matter if you are employed casually, if you move in and out of the workforce. If you build the nation, it will look after you. This appeals to my inner communist but also it means that women are not financially disadvantaged for raising the next generation of workers.
We also heard from some emerging nation's schemes. The work done in Nigeria has been phenomenal, the system looks a lot like Australia and coverage remains a problem with a large informal labour force - the same issues exist in Latin American Countries. This means that when statistics are gathered on replacement rates (the amount that the pension compensates for the amount earned before retirement), it gives a skewed picture. Replacement rates look very high - which is great - but they are only counting those who are eligible, those who have been in formal employment for long enough to meet the high hurdles and therefore receive a pension.
Of course, women are over-represented in the informal labour force and therefore subject to higher rates of poverty in old age.
I have arrived in Brussels now, heaps of meetings over the next few days in buildings where I am required to carry my passport - exciting!
M
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