Following its 20 March meeting, the Eurogroup released a statement noting that although “significant progress” had been made on improving the fiscal sustainability of pensions throughout the eurozone, “considerable risks” remain.

The benchmarking exercise will start in 2018 and be carried out every three years.

Performance will be benchmarked against two main indicators that measure the gap to a sustainable fiscal position, including the impact of pension spending.

A series of “flanking” indicators will also help to inform the benchmarking exercise and consider factors such as the legal and effective retirement age, the ratio of pensions relative to persons aged 65 or more and the average pension in relation to the average working wage. Eurogroup Jeroen Dijsselbloem said he was “very happy” about the benchmarking agreement.

“This is the second benchmarking exercise the Eurogroup has agreed to,” he said. “The first one was the benchmark on the tax wedge on labour which we started in September 2015.

“So this is the second one on the sustainability of pension systems and I think that will help to deepen our work on fiscal sustainability in macroeconomic imbalances.”