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The Reform of Bismarckian Pension Systems

The Reform of Bismarckian Pension Systems: A Comparison of Pension Politics in Austria, France, Germany, Italy and Sweden

Martin Schludi
Copyright Date: 2005
Pages: 312
https://www.jstor.org/stable/j.ctt46n0cr
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  • Book Info
    The Reform of Bismarckian Pension Systems
    Book Description:

    Pension reform has emerged as a major political issue in most advanced welfare states. Sluggish economic growth and rising unemployment put public pension systems under increasing financial pressure. In combination with a rapidly ageing population in the decades to come, these pressures render major adjustements in pension policy design inevitable, especially in countries with costly earnings-related benefit arrangements. However, timely and successful adjustement is anything but guaranteed. Both cuts of pension benefits and increases in contribution levels are bound to be highly unpopular and entail massive political risks. Thus, pension politics these days is as much about adjusting pension arrangements to changing demographic and economic conditions as it is about overcoming widespread political resistance to reforms that impose tangible losses on large parts of the population. This study reveals striking differences in the extent to which pension policy makers were able to generate a sufficient political support basis for their reform initiatives. As a consequence, pension reform outcomes reach from successful restructuring of existing pension arrangements all the way down to instances of outright policy failure. By tracing the political process of pension reform in Austria, France, Germany, Italy and Sweden since the late 1980s the book also provides us with deeper insights about the factors that facilitate - or impede - social policy reforms in the context of fiscal austerity. This title is available in the OAPEN Library - http://www.oapen.org.

    eISBN: 978-90-485-0382-7
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. 1-4)
  2. Table of Contents
    (pp. 5-5)
  3. List of Tables/List of Figures
    (pp. 6-6)
  4. Acknowledgements
    (pp. 7-8)
    Martin Schludi
  5. Introduction
    (pp. 9-12)

    The 1990s have been a decade of fundamental challenges to the European welfare states. Rising unemployment has put them under growing financial pressure, while unrestricted international capital mobility and intensified international competition have rendered existing welfare state commitments increasingly costly. Moreover, the legally binding criteria of the Maastricht Treaty have forced most European governments to adopt tight budgetary policies. The ageing of the population in virtually all European countries over the next decades will reinforce these pressures even further.

    Due to these developments, the reform of the welfare state figures prominently on the political agenda of all European governments. As...

  6. 1 The Need for Pension Reform: A Problem-Oriented Perspective
    (pp. 13-50)

    Pension systems in virtually all advanced welfare states are exposed to a number of serious internal as well as external pressures, some of which will reveal their full effect only over the coming decades. Depending on the specific institutional set-up of retirement income policies, their relative impact is likely to differ from one country to another. Broadly speaking, we may distinguish between economic, fiscal, and demographic pressures, all of which challenge the sustainability of national pension arrangements. In the following section, I will briefly portray the variety of strains with which pension policymakers in advanced welfare states have to cope....

  7. 2 An Empirical Overview of Policy Change in Bismarckian Pension Regimes
    (pp. 51-58)

    In this section I will briefly analyse to what degree the countries studied have adjusted their pension systems along the lines sketched above. I will begin by presenting a number of empirical indicators measuring the degree to which national pension policymakers have successfully addressed the short-term problems of public pension schemes. As pointed out above, governmental actors typically pursue at least three short-term goals in pension policy: the elimination or avoidance of fiscal imbalances within the public pension system, relief of the fiscal pressure on the state budget, and the stabilision of pension contributions in order to contain the growth...

  8. 3 The Politics of Pension Reform: An Actor-Centred Explanatory Framework
    (pp. 59-88)

    In the previous sections I have shown that the interplay between economic, demographic, and political pressures on Bismarckian pension schemes has triggered a multitude of reform measures throughout the 1990s, which were primarily but not exclusively aimed at curbing the growth of pension spending. This development has also left its mark on the scholarly debate about the welfare state. In recent years, welfare state research has gradually shifted from studying welfare state expansion to studying the retrenchment of welfare state arrangements (Green-Pedersen and Haverland 2002). In this chapter, I will first provide a brief survey of the most important theoretical...

  9. 4 Sweden: Policy-Oriented Bargaining
    (pp. 89-108)

    Traditionally, the Swedish pension system differs from pension arrangements in the other countries studied, in so far as it provides for a basic pension covering all residents in Sweden over 16 years of age (including most foreigners).² The National Pension System includes three schemes:

    1 the basic pension (folkspension), which consists of a universal flat-rate pension, supplemented by various partially income-tested benefits (such as housing allowances);

    2 the earnings-related supplementary pension (allmän tilläggspension, ATP);

    3 the partial pension (delpension) consisting of a part-time early retirement pension.

    Both the basic and the supplementary pension schemes provide for old age, invalidity, and...

  10. 5 Italy: Corporatist Concertation in the Shadow of EMU
    (pp. 109-128)

    Key features of the Italian pension system in the late-1980s

    The Italian pension system provides for old age, disability, and survivors’ benefits. It is divided into a number of mostly public occupational schemes. Private schemes are usually only of rudimentary significance. There are four types of public schemes:

    1 a general scheme for dependent workers;

    2 schemes for the self-employed;

    3 schemes for civil servants;

    4 schemes for special occupational groups, some of which complement the general scheme.

    In addition, there is a means-tested social pension for people over age 65 with insufficient resources who are not eligible for benefits...

  11. 6 Germany: From Consensus To Conflict
    (pp. 129-164)

    German pension insurance (Gesetzliche Rentenversicherung) provides for old age, invalidity, and survivors’ pensions. It comprises institutionally distinct schemes for blue- and white-collar workers with ultimately identical provisions. Civil servants draw pensions under the tax-financed civil service scheme (Beamtenversorgung), which provides benefits that equal 75% of final pay after 35 years’ membership. Other public employees are compulsory members of a special supplementary scheme based on collective agreements (Zusatzversorgung Öffentlicher Dienst), designed to augment pensions under the workers’ and employees’ scheme, in order to provide pensions similar to those of tenured civil servants. Members of various professions are covered by self-governing compulsory...

  12. 7 Austria: Reform Blockage by the Trade Unions
    (pp. 165-190)

    The Austrian old age pension system closely resembles the German system although the equivalence principle is weakened by a number of strong redistributive elements. Like in Germany, there are two major pension schemes for blue- and white-collar workers, which are institutionally distinct but identical in their material provisions. The self-employed in the trade and commerce sectors as well as farmers are compulsorily covered in separate schemes.

    Pension regulations for civil servants differ from those of private and public employees; the latter are covered by the general schemes for dependent workers. Civil servants draw their pensions under a separate and completely...

  13. 8 France: Adverse Prerequisites for a Pension Consensus
    (pp. 191-218)

    The French pension system comprises a large number of pay-as-you-go financed and categorically fragmented schemes with privately funded schemes of only minimal importance. Private sector employees (65% of the insured population) are covered by therégime général.For public sector employees (20%) and the self-employed (12%), a number of separate schemes exist side by side and are organised by employer and profession. Retirement age, contribution rates, and calculation of benefits vary greatly from one scheme to another (Bonoli 2000). Private sector pensions are essentially based on a two-tiered structure with a number of compulsory occupational schemes complementing the general scheme....

  14. 9 Conclusion
    (pp. 219-248)

    Welfare retrenchment is a difficult undertaking. As Pierson (1997) points out, the welfare state appears to be the most resilient aspect of the post-war political economy, with pensions probably being the most resilient part of it. This is particularly true for pension systems of the Bismarckian type covering large sections of the population and granting earnings-related benefits typically perceived as “acquired rights” on the part of the beneficiaries. Nevertheless, most governments in the countries studied have sought to reform their retirement income systems in recent years. In principle, this holds true for both left and right governments, although the experiences...

  15. Appendix I Summary Description of Retirement Systems (1986)
    (pp. 249-258)
  16. Appendix II Chronology of National Pension Reforms (from 1989 until 2001)
    (pp. 259-268)
  17. Appendix III Glossary of Terms
    (pp. 269-272)
  18. Notes
    (pp. 273-288)
  19. Bibliography
    (pp. 289-306)
  20. Index
    (pp. 307-311)