12/07/2011
By Matt Ritchie
The Organisation for Economic Co-operation and Development has suggested a range of measures Belgium could take to tackle its low effective retirement age in a new economic survey published today.
In the report, the OECD said increasing the effective retirement age, which is currently among the lowest in the OECD, is a priority and requires a “broad-based” approach.
The organisation reiterated its long-held view that remaining “exit routes” to early retirement should be closed. In order to do this, the study said measures should focus on increasing the enrolment age in early retirement programmes, and replacing sectoral exemptions.
Furthermore, the report suggests changes aimed at making it more economically beneficial to remain in the labour market, pointing to a need for increasing the taxation of pensions to the same level as is applied to similar income from other sources.
The study said older workers on unemployment benefits should be subject to the standard search obligations applicable to other unemployed without exemptions, and all employer-provided top-ups should be taxed similarly to other work-related income.
“In addition, a differential in the accumulation of pension entitlements between unemployed and employed should be introduced. The 2005 Intergenerational Solidarity Pact contains provisions for longer careers to secure a full pension as the increase in the effective retirement age falls short of expectations. The effectiveness of this strategy will depend on introducing measures to improve labour demand for older workers, such as ensuring that their wages and productivity are aligned,” the report said.
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