Finance ministers of eurozone countries agreed to benchmark the fiscal sustainability of pension systems in member states against the best performers in the region.
In a news release Tuesday, the so-called Eurogroup said benchmarking will be based on a set of indicators, including the fiscal sustainability of systems and best national practices. There will also be complementary indicators, including the comparative level and evolution of the legal and effective retirement age, the funding ratio and the pension benefit ratio.
The benchmarking exercise will be conducted every three years starting next year.
The Eurogroup last discussed the topic in June, where finance ministers agreed on a set of common principles for strengthening pension sustainability.
"The Eurogroup recalls that in times of high public debt, the importance of pension sustainability from a financial, economic and social point of view renders developments in this field a matter of common concern in the euro area," said a notice on the Eurogroup website. "The Eurogroup considers that significant progress has been achieved in improving pension sustainability in the euro area. However, it also acknowledges that considerable risks remain in many member states and that further policy action is needed. Against this background, the Eurogroup considers benchmarking to be a useful tool for highlighting the possible need and scope for further reform in this field."