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Finland 2013. Aging and solidarity in the United States : What we can learn and transfer to the European Union?. Nyleñka Paille Jihann Kheladi Tachrifa Maoulida Morganne Van Den Berghe Magali Lecomp te Guillaume Tlalka. SUMMARY. Overview of the American economy
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Finland 2013 Aging and solidarity in the United States : What we can learn and transfer to the European Union? Nyleñka Paille Jihann Kheladi Tachrifa Maoulida Morganne Van Den Berghe Magali Lecompte Guillaume Tlalka
SUMMARY • Overview of the American economy • Evolution of the elderly’s part in the United States • Place of the elderly in the American society • The US pension schemes • What reforms may be applied in Europe ?
Overview of the American economy • World's largest economy with dynamic sectors • The largest importer of goods and third exporter • Unemployment rate : 7.7 % • HDI : 0.910 => 3rd rank
Nearly 1/5 of the Americans continue to work beyond 65 years Thus, one of the first activities of the elderly is work, with the opportunity to change careers or pursue new interests They are involved in the community and are active members of many associations Individualistic society that puts “apart” the elderly Place of the elderly in the American society
96% of American employees contribute to the social insurance scheme The pensions provided by the Social Security are calculated based on the number of years worked, contributions and inflation The payment of benefits is based on what the employee has earned during his/her career The US pension schemes Social Security
The US pension schemes Social Security • The benefit can also be affected by the age at which the employee decides to retire.
This plan must be funded solely from contributions levied on wages (that are the same between employers and employees) Employee contributions are collected at the same time and by the same channels as the income tax. That’s why they are seen as tax and not as contributions The US pension schemes Social Security
To enjoy a comfortable retirement, a person will need 70 to 80 % of his/her income.Social Security will replace about 40 percent of previous income. The US pension schemes Social Security
Today, about 21% of the private sector employees and 71% of employees of state are members of a pension plan with defined benefits. These rates are declining The private pension plans are guaranteed by employers, or by employers and unions The US pension schemes Pensions provided by firms
Funded pension operates on the principle of accumulation by workers of a stock of capital used to finance the future pensions To variations of capital due to purchases, sales and reinvestment of the revenues is added variations depending on the overall economic situation, on bubbles that increase the capital gain, and on crisis that reduce it The US pension schemes Funded pension
The US pension schemes Additional federal aid • The poorest pensioners receive additional federal aid (the OASDHI) and care (Medicare)
The US pension schemes • Income structure of the elderly by income quintile, 2010
What reforms may be applied in Europe ? • Adapting the statutory retirement age and contributions to longevity • Increasing the effective retirement age by eliminating early exit pathways from the labor market • A higher participation rate for women • Developing multi-pillar systems to release the load on the public liabilities
What reforms may be applied in Europe ? • Lowering benefits on existing pension schemes • Promoting the creation of new jobs towards the elderly (companionships, etc.)
Conclusion • The American system is in crisis, notably because the part of the pension provided by the Social Security is very low and isn’t sufficient to survive. • Concerning the pensions provided by the firms, many people are not eligible. That’s why many people have to work after retiring, because they don’t have enough money to survive. • Finally, Americans are very individualistic and don’t want to pay more tax so that helping each other.
