Since a couple of decades, the pension policy of member states is a focal point of attention on the European level. Traditionally, the focus was primarily on securing the financial sustainability. But a sensible assessment of financial sustainability cannot do without taking into account the social impact of ageing, budgetary and pension policy. However, prospective values of the key ISG indicators, such as the risk of poverty rate or the Gini, are not available.
This paper presents the results of a project where dynamic microsimulation models are used to simulate possible developments of (pension) adequacy while taking into account the projections and hypotheses of the AWG as much as possible. As such, this project demonstrate the potential value of using dynamic microsimulation on the EU level.