Ομιλία - Παρουσίαση: Falco Valkenburg,Vice-Chairperson Occupational Pensions Stakeholder Group of the European Insurance and Occupational Pensions Authority, Past Chairperson of the Actuarial Association of Europe

1. A New Retirement Story
About Adequacy, Sustainability and
Creating a Life you don’t want to retire from
Falco Valkenburg
Athens, 22 February 2022

2. We are living longer and longer
Male expected remaining lifetime at 65 (2019-2070)
Average increase 27% (range 21% - 51%)
14,0
16,0
18,0
20,0
22,0
24,0
2019 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070
FR ES EL IT MT IE NO LU SE BE AT CY NL FI
DE DK PT SI EE PL CZ HR RO SK LT HU LV BG

3. We are living longer and longer
Female expected remaining lifetime at 65 (2019-2070)
Average increase 22% (range 16% - 37%)
18,0
19,0
20,0
21,0
22,0
23,0
24,0
25,0
26,0
27,0
28,0
2019 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070
FR ES IT LU MT BE SI FI IE EL PT AT SE NO
EE DE CY DK NL PL CZ LT SK LV HU RO HR BG

4. We are producing less babies
Fertility rates 1960-2070
1
1,5
2
2,5
3
3,5
4
1960 1970 1980 1990 2000 2010 2016 2019 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070
AT BE BG CY CZ DE DK EE EL ES FI FR HR HU
IE IT LT LU LV MT NL NO PL PT RO SE SI SK

5. Projection of net migration flow 2019-2070
Net migration
flow in 2019
(000s)
Cumulative
net migration
2016-2070
Cumulative as
% of 2019
population
MT 12,8 279,0 55,8
LU 10,2 191,6 30,9
NO 25,3 1305,0 24,4
SE 66,7 2247,3 21,9
ES 438,5 9914,0 21,0
CY 7,8 162,8 18,5
IT 134,7 10789,8 17,9
IE 32,7 840,5 17,0
AT 44,3 1501,9 16,9
DE 277,4 12026,7 14,5
SI 15,7 277,9 13,3
HU 36,3 1229,6 12,6
FI 17,6 630,5 11,4
NL 105,4 1919,2 11,1
DK -1,6 559,1 9,6
BE 45,0 1101,1 9,6
EE 6,6 120,5 9,1
CZ 44,2 956,2 9,0
EL 13,7 914,6 8,5
PT 40,1 764,7 7,4
PL 3,3 2124,0 5,6
FR 38,1 3658,6 5,5
SK 3,4 271,5 5,0
BG -3,9 204,6 2,9
HR -3,8 75,7 1,9
RO -73,5 -816,0 -4,2
LT 10,1 -161,4 -5,8
LV -3,9 -188,1 -9,8
EA 1249,9 45015,3 13,1
EU 1317,5 51595,9 11,5

6. Living longer
increases pension costs with some 25%
Lower fertility
increases pension costs Pay-As-You-Go systems
Migration flow
mitigates pension costs in most member states

7. Sources:
▪ 2021 Ageing Report (https://ec.europa.eu/info/publications/2021-ageing-report-economic-and-budgetary-projections-eu-member-states-2019-2070_en)
▪ 398 pages Economic Projections
▪ 238 pages Assumptions and Methodologies
▪ 5,112 lines of data in spreadsheet
▪ 2021 Pension Adequacy Report (https://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=8397&furtherPubs=yes)
▪ 152 pages Volume 1
▪ 359 pages Volume 2
▪ That is 1,147 pages in total + a load of data in tables

8. Shrinking working population
Growing elderly population
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
60,0%
70,0%
80,0%
2019 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070
Dependency ratio: Elderly population 65+ / Working population (20-65)
BE BG CZ DK DE EE IE EL ES FR HR IT CY LV
LT LU HU MT NL AT PL PT RO SI SK FI SE NO

9. Possible impact increasing retirement age
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
60,0%
70,0%
80,0%
2019 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070
Dependency ratio: retirement age rising in 20 years from 65 to 75
BE BG CZ DK DE EE IE EL ES FR HR IT CY LV
LT LU HU MT NL AT PL PT RO SI SK FI SE NO

10. Public pension expenditures in 2019 and 2070, % of GDP
2019 2070 Change
LU 9,2 18,0 95%
SK 8,3 14,2 70%
IE 4,6 7,6 66%
SI 10,0 16,0 60%
MT 7,1 10,9 54%
HU 8,3 12,4 49%
RO 8,1 11,9 47%
CZ 8,0 10,9 36%
NL 6,8 9,1 34%
BE 12,2 15,2 25%
NO 11,0 13,6 24%
CY 8,8 10,9 24%
DE 10,3 12,4 21%
BG 8,3 9,7 16%
FI 13,0 14,4 10%
AT 13,3 14,3 7%
LT 7,1 7,5 5%
EU 11,6 11,7 1%
PL 10,6 10,5 -2%
SE 7,6 7,5 -2%
HR 10,2 9,5 -7%
IT 15,4 13,6 -12%
FR 14,8 12,6 -15%
ES 12,3 10,3 -17%
LV 7,1 5,9 -17%
DK 9,3 7,3 -22%
EL 15,7 11,9 -24%
PT 12,7 9,5 -25%
EE 7,8 5,4 -30%

11. Change in Benefit Ratios 2019-2070
Benefit ratio is comparing
average public pension to
average wage.
(figures refer to earnings-related public
pensions)
Country 2019 2070 Change
ES 60,0 29,4 -51%
PL 43,8 22,8 -48%
PT 58,9 32,5 -45%
LV 23,0 13,5 -41%
NO 56,0 34,1 -39%
EE 28,8 17,7 -39%
EL 65,4 43,5 -34%
FR 40,9 27,9 -32%
HR 31,2 21,8 -30%
SE 35,5 24,8 -30%
MT 44,9 33,0 -26%
CY 59,5 44,1 -26%
IT 60,8 45,6 -25%
EU 42,1 32,8 -22%
LT 26,7 20,8 -22%
AT 53,6 42,5 -21%
FI 52,2 41,6 -20%
DK 42,8 36,1 -16%
LU 52,6 45,0 -14%
SK 37,0 32,4 -13%
BG 26,7 23,5 -12%
BE 45,0 41,9 -7%
DE 41,8 39,1 -7%
NL 37,2 35,3 -5%
RO 32,5 30,8 -5%
CZ 38,5 37,3 -3%
IE 28,1 28,2 0%
HU 37,5 39,6 5%
SI 30,8 34,2 11%

12. My Conclusions
• Demographic pressure: driving costs up
• Financial Sustainability has got or will get much
attention
• Financial Adequacy is under pressure
My Thoughts
• Funded pensions provide important diversification
• PEPP: an interesting new funded option
• Retiring old ideas about retirement

14. Retire Traditional Retirement
Creating a Life and Work
We Don’t Want to Retire From
The New Retirement Story

15. 1. Age 65 is Old
2. Being retired means
you’re not working
3. You must be retired
to do what you really want to do
4. Retirement is exclusively an
economic event
5. A Life of Ease is the Ultimate
Retirement Goal
5 Myths
Nana Mouskouri, 2014, 80 years of age
Michael Caine: “I’ll Never Retire”
Paul Efmorfidis, Founder Coco-Mat
Warren Buffet thinks work makes life more
meaningful
A life of ease is only one step away from disease
First you become bored and then you become boring

16. Some Thoughts for inspiration (Start of an innovation agenda?)
1. To introduce The Personal Pension Age
versus age 65 (or 67) is old (and forced to become just a spectator)
2. To organize the Great Comeback for people who are too early fully retired
versus being retired means you’re not working
3. To start a ‘Encore a Talent’ national campaign for 45+
versus you have to be retired to do what you really want to do
I would suggest to start creating work from which we don’t want to retire
– Work is only work if you in fact would prefer doing something else

17. “Retirement is the Ugliest Word in the
History of Mankind”
Ernest Hemingway

18. Falco Valkenburg
Independent Actuary
Penultimate Chairperson Actuarial Association of Europe
Vice-Chairperson Occupational Pensions Stakeholder Group EIOPA
M +31 (0)6 22 78 50 29
E hello@falcovalkenburg.eu
W www.falcovalkenburg.eu
Twitter @FalcoValkenburg
LinkedIn: nl.linkedin.com/in/falcovalkenburg