The level of state provision for old age pensions is a national competence, as is the age at which people become entitled to it.
The EU Court has interfered in the financing of pension systems through the Danner case. In this case a country was not permitted to limit tax reductions for pension schemes established in another country.
The EU also forbids discrimination between the sexes or on the grounds of nationality. This has led some EU countries, the UK for example, to introduce similar qualifying ages for pensions for men and women. Most European States´ pension schemes are pay-related, whereas in the UK and Ireland they are flat rate and so cost much less to finance.
The EU member states have ageing populations, consequently the future cost of old age pensions throughout the EU is regarded as a growing problem. There are implications for future public debt levels and the management of the Euro currency.
The future
Certain areas of social policy (defined in part III of the EU Constitution - see, for example, Art. III-104) are proposed as a shared competence in the EU Constitution - EU law would therefore suppress member states' existing legislation and right to legislate in these areas (see Art. 13.4).