Working Group on Ageing Populations and Sustainability

The ageing of the population is becoming a growing challenge to the sustainability of public finances in the EU Member States. The increase of the ratio between the number of retirees and the number of workers will amplify expenditure on public pensions and health and long-term care and thus puts a burden on maintaining a sound balance between future public expenditure and tax revenues.

Peter Part - Chairman

Scope

The EPC's Working Group on Ageing Populations and Sustainability (AWG) is constituted to contribute to improving the quantitative assessment of the long-term sustainability of public finances and economic consequences of ageing populations of the EU Member States, so as to assist policy formation.

The 'Code of Conduct' on the content and format of the Stability and Convergence Programmes (SCPs) stipulates that the common budgetary projections by the EPC’s AWG provide the basis for the assessment by the Council and the Commission of sustainability of the Member States' public finances, within the context of the Stability and Growth Pact.' The work by the AWG should also feed into the work of the Lisbon process and other relevant co-ordination processes.

Main tasks

The core and priority business of the AWG is to:

carry out the common age-related budgetary projections. Based on guidance from the EPC, this could include exploring the extension of their coverage, further developing the methodology and improving quality and cross-country comparability.
contribute to the development of the assessment of long-term sustainability of public finances based notably on the common long-term projection results including through appropriate indicators. Work is directed to improve quality, comparability and consistency, in particular in the context of the SCPs. In this context, the AWG also carries out peer reviews of new major pension reforms
subject to the above priorities, and as mandated by the EPC, time- and resource-permitting the AWG may also contribute to the discussion on other important issues in analysing long-term fiscal sustainability and the macroeconomic aggregates most likely to be affected by ageing. In this context, it may assist the EFC, as appropriate, in the technical work on a methodology for taking into account implicit government liabilities in medium-term budgetary objectives.

Participation

Member States, the Commission services and the ECB should be represented by two experts. The OECD participates as observer. There should be close co-operation with Eurostat, in particular on population projections, as well as with National Statistical Institutes. Where appropriate, it should also liaise with other relevant institutions (i.e. as IMF, WB), other Committees (mainly the Social Protection Committee) and their related working groups and research institutions that develop methodologies and prepare projections in this area.

Reports

- Joint Healthcare Report [2 MB]