Did you know that your pension benefits from within Europe will come from different sources? The reasons being that:
- Each European state/country has its own pension landscape.
- Legislation is set up and supervised by each state individually.
- The pension landscapes consist of different pillars, tiers and levels.
Maybe you’ve noticed some differences already while moving around. These are in relation to the country’s history, its economic situation and other aspects. In countries with high statutory pensions, occupational pension schemes are often rare. This is quite different in states whose statutory system only offers a basic pension, often linked to residential requirements and not necessarily to gainful employment. Here, occupational pension systems traditionally belong to the old-age-provision concept and the coverage rate is much higher than in other countries.
The ancient building is our symbol for the statutory, state or public pension schemes. In the 3 sources-system approach, it represents the 1st pillar of pension provision. Membership is obligatory for all persons who are employed or self- employed (depends on the country) or in some states it is even compulsory to all residents, regardless of their income. In most cases the benefits are old-age -, survivor- and incapacity pensions.
The office building represents the workplace related / occupational or company pension schemes. Membership can be mandatory or voluntary, but those schemes usually are set up by employers. The schemes are sometimes obligatory by law or for example on the basis of collective agreements. Mostly they are defined as 2nd pillar.
Private Pension Savings
The private house symbolises the voluntary, private pension savings schemes and are also categorized as the 3rd pillar. In this framework, old-age provision is based on the voluntary choice of the individual who wants to build up savings for retirement. Due to its additional and individual character, contributions are only paid by the employee, but in many countries the state promotes saving- especially through tax reliefs up to a certain limit or subsidies. The private pension schemes are managed by private institutions, e.g. private pension funds or life insurance companies.