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Special Pensions in the EU

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  • Per Eckefeldt
  • Anda Pătărău

Abstract

Most EU countries have special pensions, alongside their general pension systems. Generally, special pensions are granted to beneficiaries with a special status, such as state employees of all branches of government (legislative, executive, judiciary), security and defence forces, including some civil professions, and people that work under difficult conditions. In most countries, special pensions were introduced long ago. Hallmarks of special pensions usually include a lower retirement age, contributory periods counted more favourably, or higher benefits. However, recent national reforms indicate that such preferential schemes are being phased out, especially in the case of security and defence workers and state employees. This raises questions on the rationale for continuing with special pension schemes in the future. On the one hand, certain special pension categories seem justified, such as those involving occupational risks that can harm workers’ health and safety. This includes people working under difficult conditions and professions for which physical condition is crucial for carrying out one’s duties, such as security and defence forces, civil aviation or air traffic controllers. However, compensation for these categories of workers could take the form of higher wages and/or employers’ contribution rates, rather than pensions, as these factors would automatically lead to higher pension benefits. On the other hand, special pensions for state employees and employees of (former) state-owned enterprises are more controversial in terms of social equity and administrative efficiency. The remaining categories of special pensions fall somewhere in between. Even when compensation for some groups experiencing negative externalities or inequalities appears justified, special pensions may not necessarily be the most suitable form of social transfer.

Suggested Citation

  • Per Eckefeldt & Anda Pătărău, 2020. "Special Pensions in the EU," European Economy - Discussion Papers 125, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
  • Handle: RePEc:euf:dispap:125
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    File URL: https://economy-finance.ec.europa.eu/publications/special-pensions-eu_en
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    References listed on IDEAS

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    1. Francisco de Castro & Matteo Salto & Hugo Steiner, 2013. "The gap between public and private wages: new evidence for the EU," European Economy - Economic Papers 2008 - 2015 508, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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