EIOPA Chair Petra Hielkema's interview with Kathimerini on October 11, 2025

Q1: The demographic crisis in Europe raises reasonable questions about the sustainability of state pensions. First of all, what is the picture that is forming before us based on the projections for the not so distant future?

Europe is indeed in the midst of a profound demographic shift and this is placing real pressure on pension systems. To give you a sense of scale: in the early 1990s, the median European was around 34 years old. Since then, our societies have aged considerably: half of all the people on our continent are now older than 45. Some thirty years ago, we had 5 working-age people for every pensioner. Today, we have three. By the middle of this century, there will be fewer than two – on average. In the case of Greece, projections suggest less than 1.5 workers for every retiree.

This shift has major implications for countries with so-called pay-as-you-go systems, which are widespread across the continent. In these systems, the pensions of retirees are financed by the contributions of active workers on a rolling basis. When the balance between workers and retirees changes so dramatically, the system struggles to stay sustainable. In simple terms: the math of the social contract no longer adds up.

Correcting this imbalance isn’t easy. The obvious “fixes” each come with trade-offs. Reducing pension benefits risks pushing more people into old-age poverty. Raising contributions burdens workers who already question whether the system will be there for them when they retire. That’s why the way forward has to involve thoughtful reforms and, importantly, a shift in how we think about saving for retirement.

Q2: In this environment, what will be the directions that European governments should now follow? What best practices would you highlight for the protection of pensions in the years to come?

There isn’t a single silver bullet for Europe’s pension challenge as each country’s social system is unique in its own way. One thing is clear, though: countries that have  diversified their sources of financing through supplementary pensions face the future pension crunch from a stronger position, making them more resilient when pressures mount.

At the same time, this challenge doesn’t fall on governments alone. Yes, the state can help – through tax breaks or incentives to save earlier – but in the end, people also need to diversify their own sources of retirement income.

As governments reach the limits of what they can sustainably spend on social welfare, supplementary pensions become increasingly important. That’s why, in our advice to the European Commission on its flagship Savings and Investments Union initiative, we highlighted ways to promote stronger financial planning for retirement among citizens. These include greater transparency around expected pension entitlements via tracking systems and auto-enrollment in occupational pension schemes, with the possibility to opt out. International experience shows that such measures can significantly boost participation and foster more conscious retirement planning.

Q3: Do you think that we are moving towards increasing the retirement age?

That is an incredibly difficult and complex topic – and not only because of its political dimension. If you look back over the past decades, the retirement age has gone up in most countries. In some cases, it’s even linked to life expectancy – as in Portugal, Denmark, or the Netherlands. Since 2021, Greece has also introduced an automatic reassessment every three years. So yes, we are already moving towards a higher retirement age – in theory. In reality, many other aspects influence when people retire, including illnesses and disabilities, so the effective retirement age tends to be lower than the one set by the state.

But are we really heading towards a world where 80-year-olds have to keep working? I’m not convinced. Longer life expectancy doesn’t mean people remain fit for work indefinitely. Some, typically in white-collar jobs, may be able to stay on a few more years. But for those in physically demanding jobs, it’s simply not realistic – and at some point, it starts to feel deeply unjust. I don’t believe that’s the kind of society we want to build.

That’s exactly why starting pensions saving early on and smarter investments in occupational and personal pensions are so vital. They give people more financial security without having to push the retirement age higher and higher.

Q4: Is increasing individual savings part of the solution? And is it realistic in the current conditions of weak growth rates and high cost of living?

Talking about “an increase in savings” can be a little misleading here. Europeans are already saving a lot. On average, households put aside about 15% of their disposable income every month. That’s roughly three times as much as in the US, in percentile terms. The real question is what happens with the money we save.

We do not have to save more. We have to save more efficiently – in a way that allows citizens to build wealth. Today, the vast majority of household savings – around €10 trillion – sits in bank deposits and cash, which offer little to no yield and lose value when inflation is high. By contrast, the potential of capital markets is severely underused, though there is growing momentum for change.

To really address the pension gap opened up by demographic change, we need a robust three-pillar approach: state pensions, occupational pensions, and personal pensions.  Reforms in this field can be implemented relatively quickly when there is sufficient ambition. The Dutch occupational pension system, one of the most developed in Europe, was built in the challenging years following World War II. The UK established its auto-enrolment regime in  the midst of the 2008 financial crisis. Progress is therefore possible even in hard times.

Q5: On the one hand, the needs in terms of pensions are increasing, on the other hand, high social security contributions are a brake on the development of businesses. Is there a golden mean? How can the protection of social security systems not work at the expense of growth?

As populations age, spending on pensions and health care will inevitably rise, putting pressure on public finances. At the same time, there is only so much businesses can be asked to contribute before their competitiveness is undermined. 

If Member States continue to rely solely on pay-as-you-go systems and respond to demographic pressures by increasing social security contributions from both employers and workers, they will not effectively address the challenges of ageing populations and growing pension gaps. Policies that aim to develop or strengthen supplementary pension schemes can help allocate resources more efficiently and support economic growth and productivity, as contributions from employers and workers are invested rather than simply redistributed.

Q6: Where does Greece rank in terms of government spending on pensions as a percentage of GDP, in relation to the other European countries? What is your broader comment on the Greek case, which is associated with some of the highest rates of demographic ageing in Europe?

Greece spends around 11-12% of GDP on old-age statutory pensions, which places it among the highest in the EU, though slightly behind or on par with countries like Italy, France, Austria, and Finland. Given Greece’s demographics, this isn’t particularly surprising.

Pensions statistics also show that Greek retirees have had one of the highest replacement rates in Europe. On average, pensioners in Greece received 84% of their pre-retirement income in 2024, compared to an EU average of 60%. Of course this is all a function of wages, which vary significantly across the Union, so it’s important to consider this context before drawing conclusions. In purchasing power terms, Greek pensions are actually in the middle of the pack.

One thing is certain: as the number of retirees grows and the working population shrinks, pension spending is set to rise further. This makes the development of supplementary pensions all the more important. Greece has already taken a step in this direction with the introduction of TEKA in 2022, which auto-enrolls young professionals in a defined contribution scheme. We continue to believe in the advantages of Pillar II and Pillar III pensions as a way to further diversify funding sources. Looking ahead, Greece could seek to expand the scale of occupational pensions and explore solutions to include gig workers and those in irregular employment.

Q7: The pension sector, and in particular practices such as early retirement, were among the main causes of the fiscal derailment that led to the Greek debt crisis. What is your view of the fiscal risk implied by the ominous projections for pension systems in ageing Europe?

The Greek debt crisis was a multifaceted crisis, but weak fiscal discipline was the main vulnerability for the country and it amplified global shockwaves at a local level. Since then, the country has worked hard to balance the books and turn things around.

Still, an ageing Europe will eventually become a systemic risk to financial stability if Member States across the continent do not act now. And while financial crises do happen, we should do our best to steer clear of the predictable ones. The pension challenge is already taking shape — and we cannot afford to gamble with people’s future retirement.

At the same time, these pressing investments compete with the same public funds needed for social services, including pensions. To ease this burden and ensure dignified retirements, diversification into supplementary pensions is a must, not a nice-to-have.

Q8: Meanwhile, the era of demographic ageing is accompanied by a notable increase in natural disasters due to climate change. Greece, given its geographical location in the European South, is in fact at the forefront in this regard. What is the reality that is being generated for insurance against natural disasters and what are the recommendations of your organization in this direction?

As our planet warms, natural catastrophes are becoming more frequent and more devastating. The moderate temperatures and precipitation patterns our every day life relied on – including our health, agriculture and industry – can no longer be taken for granted.

In Europe, losses from natural catastrophes have almost tripled over the past 20 years and now average around €40 billion each year. To stay resilient and keep insurance both affordable and available, we need to do two things: lower risks as much as possible through mitigation and adaptation, and spread the risks that remain.

This requires everyone to play a role – households, businesses, insurers, and governments alike – otherwise the costs will be insurmountable. We need to keep insurers engaged by ensuring that policies can be priced to the actual risks, while at the same time trying to lower premiums. This can be achieved through clever market mechanisms like reinsurance and catastrophe bonds and by bringing in the state when needed.

We can rise to this challenge, but it will only work through honest collaboration across the board.

The article is available in Greek under the following link and in the PDF below.