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A discussion paper of the Actuarial Association of Europe (Prepared by the Social Security Sub-committee of the Pensions Committee) The EU is getting older, both because people are living longer and because there have not been enough births. The population aged from 15 to 64, which accounts for most workers, is projected to fall by 17% for the EU27 as a whole and by more than 25% in 12 Member States. Meanwhile in every European country the costs of Health Care and Longâ€“Term Care are projected to rise. The pressure to consolidate public finances as fast as possible has forced policy-makers into uncharted waters. A variety of measures have been taken (and are still being taken) to reform pension systems, focusing on financially sustainable pension costs but with the result that in general pension adequacy is compromised. This paper provides analyses and insights into some of the important issues raised by the European Commission's recent publications. Following emergence from the crisis period, the paper discusses the pension reforms and growth in health care expenditure under the dramatic changes in the EU demography. Answers are given on: â€¢ How the pension reforms affected the sustainability and adequacy of the pension schemes? â€¢ How the Social Security benefits could be expected to develop in the coming years? â€¢ On the pension adequacy of which social groups should there be a particular focus? â€¢ What is the best way to communicate the liabilities of public pensions in national accounts? â€¢ How Health Care costs and Longâ€“Term Care costs are affected, given that the dynamics of family are changing and will continue to change in the future? â€¢ How these new challenges could be interpreted in a way which will be communicated to the public at large? As actuaries with expertise in the quantification and management of long term risks we are responding to the challenges for financing retirement income and health care costs for the elderly. Our active role as professionals in analysing the impact of future changes and offering advice to the EU and national institutions is highlighted. Key words: member states, pension costs, pension adequacy, sustainability, health care, longâ€“term care