Artikel [ Article 2007121004 - 10/12/2007]

An analysis of recent measures concerning the pension scheme for the self-employed

MoSES (Model of the Self-Employed Scheme) makes  forecasts about the average annual pension of self-employed  workers, in co-ordination the long-term modelling  system MALTESE. The first version of MoSES took  the following parameters into account: sex, type of activity  (on which the level of income depends), type of  career (homogeneous or  mixed), career length, type of  pension (retirement pension, survivor’s pension), and  the pension tariff (for a household or a single person)  chosen by each individual. It then projected the “stock”  of pensioners on the basis of the sex, marital status and  age of the beneficiaries, as well as the pension tariff and  the type of pension. In the new version,  an essential variable  has been added: the age of retirement (a specific  career length is associated with each age and entry category).  With the new version, it is now possible to make  a double projection at the level of the stock: a projection  for the beneficiaries of the minimum pension and a projection  for other beneficiaries (each of them receiving a  specific average pension benefit). From now on, it will  be possible to analyse several characteristics of the evolution  of the average pension in the self-employed  scheme. It  shows, for instance, that the growth rate of  the average pension benefit – and, hence, of pension expenditure  – depends more on the growth rate of the  minimum pension – which is laid down by law – than  on other variables such as income growth or the income  ceilings of the self-employed.

Due to the new modelling, we can analyse a wide range  of measures. Indeed, the model incorporates typical cases  and stresses two essential parameters of the scheme:  firstly, the minimum pension benefit is preponderant,  and, secondly, the majority of beneficiaries receive a  mixed pension benefit (i.e. from both the self-employed  and the wage-earner scheme). The model not only assesses  the budgetary cost of measures for the short, medium  and long term but it can calculate their impact on  the average pension  benefit for all beneficiaries or for  specific categories such as women, beneficiaries of homogeneous  pension benefits, beneficiaries of a survivor’s  pension and beneficiaries of pensions that started  before a particular year, etc.

By analysing the measures that have been adopted recently  within the framework of the Council of Ostend  and the Generation Pact, MoSES was able to highlight  the fact that welfare adaptations – which, in the case of  wage-earners, apply to almost all pensions – only have a  limited impact on the self-employed, as a great many of  them rely on the minimum pension anyway. Indeed, a  welfare adaptation of 2% amounts to a mere 0.9% rise in  the average pension benefit for self-employed men and  a 1.2% rise for self- employed women (the reason being  that even after the rise is applied, a great number of pensions  remain below the minimum level). The model has  also showed that raising the minimum pension has a  greater impact on average pensions in the self-employed  scheme. However, such a measure leaves several  categories of beneficiaries aside. For example, many  women who are on a very low pension would not benefit  from such a measure, because they have not worked  for long enough to get the minimum pension. Still, a  16% rise of the minimum pension over a period of four  years leads to an average pension benefit increase of  12.3% for men and 10.1% for women in the self-employed  scheme.

The pension scheme for the self-employed is more complex  and far less homogeneous than the scheme for  wage-earners. Some measures that are worked out with  the beneficiaries of the wage-earner scheme in mind –  i.e. the vast majority of pensioners – sometimes fail to  reach their objective or have a different impact in the  self-employed scheme.