Financial Sustainability Above All Else? Drivers and Types of Pension Reform Recommendations in EU Socio‐economic Governance

Abstract

AbstractThe average age of the population and the ratio of workers to pensioners in the European Union (EU) are rising, putting increasing pressure on the long‐term sustainability of pension systems. To counteract this development, a large number of pension reform recommendations (PRRs) have been issued within EU socio‐economic governance. In this article, we analyse the extent to which PRRs are consistent with the three main objectives of the open method of coordination (OMC), which emphasise (i) financial sustainability, (ii) benefit adequacy and (iii) modernisation with respect to gender equality. Using an original dataset, we code 438 PRRs from 2011 to 2023 and analyse the extent to which these are consistent with the three main objectives of the OMC. Our results show that PRRs are primarily focused on financial sustainability, to the detriment of adequacy and modernisation, and that they are driven solely by sustainability concerns.