The Finnish Citizens’ Initiative On Pension Indexation
University of Helsinki, Finland
It is well-known that population ageing affects pension schemes. The number of pensioners increases, while the number of those paying pension contributions drops – creating an imbalance. This imbalance is particularly problematic for pay-as-you-go-financed pension schemes, which redistribute across generations. Therefore, policymakers across Europe have been reforming pension schemes, trying to limit the amount of benefits distributed. In 2016, Finnish citizens tried to overturn this process. A citizens’ initiative brought the suggestion to parliament to change the pension indexation – which would immediately increase the pension benefits distributed. Today’s workers would have had to pay for this reform through increased pension contributions. After several days of debate, the parliament rejected the reform suggestion. This study analyzes newspaper articles and parliamentary debates on the reform suggestion. The research questions are: Who participates in the debates around the reform suggestion? And which arguments are used in the debates? The analysis finds that mainly older citizens supported the reform. In many cases, their opinions were based on wishes and emotions, less often on arguments. Where arguments were made, they partly self-contradicting. Youths and middle-agers, who would have also been affected by the reform, largely stayed out of the debates. Their interests were mainly voiced by experts, such as researchers. These findings show that we already now experience generational conflicts due to population ageing, The winners of the conflicts do not need to be those with the better arguments, but they may just as well be those who take the time to engage in the conflict.
Securing Old-age Income in Times of Rising Employment Uncertainty: Comparing 7 European Countries
University of Duisburg-Essen, Germany
Faced with demographic ageing, many countries have introduced multi-pillar pension systems – combining public, occupational and private pensions – to ensure the future sustainability of old age income. Young labour market entrants are often expected to invest into such plans. At the same time, the labor market situation of youth has worsened, as they often face (long-term) unemployment and are disproportionately found in atypical work. The uncertainty associated with these employment instabilities hinders young people to make appropriate savings for old age.
Our paper will analyze evidence from seven selected country cases – Sweden, the United Kingdom, Germany, Italy, Poland, Estonia and Ukraine – to investigate what consequences employment uncertainties have for young people’s future pensions and to what degree country-specific policies mediate their possibly detrimental effect.
The paper utilizes findings from institutional analyses of public pension systems. In additions, expert interviews with scientists as well as administrators from financial institutions are used to similarly assess the effect of employment uncertainties on private and occupational pension plans.
Results and conclusions
The paper synthesizes the findings from these analyses and derives policy recommendations to ensure sustainable pensions for future generations. It highlights that the ability of public pension systems to ensure a decent standard of living is shrinking. Additional pension plans, however, are often not fully able to fill this pension gap, particularly for those young people facing employment uncertainties. Against this background, the paper argues for an extension of mandatory savings into occupational and private plans, supported by respective governmental policies.
Pension Reforms and Old Age Inequalities in Europe
University of Oxford, United Kingdom
Pension reforms cut back public pension benefits, gradually extended the official retirement age, and fostered privately funded pensions. This marketization and privatization of income responsibility in old age has already important social consequence today. While the sustainability of pension reforms in the face of demographic ageing has been widely discussed, the adequacy of retirement income has often been neglected from current debate, partly because poverty in old age seemed no pressing concern in advanced welfare states until recently. However, already in the past, poverty and income inequality varies across pension systems in Europe. Cross-national comparison shows considerable variation across Europe when we analyse poverty rates at different levels. Using past and current EU-SILC and LIS indicators, a comparative analysis of poverty rates in old age reveals that Beveridge basic security is not always capable of effectively reducing poverty despite the explicit purpose to do so, while some contributory Bismarckian systems are better suited to reduce poverty, despite focusing on status maintenance. The lowest poverty rates are found in the relatively generous Dutch and Danish basic pensions, while Finland and Sweden have moved away from basic pension to a new multipillar system that is doing still relatively well. In contrast, Ireland, the United Kingdom and Switzerland with basic security and Belgium, Greece, Italy and Spain as well as Slovenia with meagre pensions have the highest poverty rates, coming close to US levels. Considering indicators of inequality, the elderly are more at risk than the working population with the exception of few Bismarck systems (France, Germany, and some CEE countries) as well as the Dutch multipillar system.
The Discursive Change From ‘Early’ To ‘Late’ Exit
Aalborg University, Denmark
The aim of this paper is to analyze how new ideas about how and when to terminate working life have been discursivated and institutionalized as new norms of appropriate behavior at the international level as well as in countries such as Denmark, Germany and the UK.
The paper analyzes how the emergence of new ideas (i.e. ideas about the transition from early to late exit) is rooted in new linguistic events strategically expressed in speech, writing, reports etc. orchestrated by international and national ‘change agents’ such as (1) policy, (2) campaign and (3) discourse institutions. Examples of national policy institutions are public commissions, while the EU agency ‘Eurofound’ is an example of an international policy institution. Examples of national campaign institutions are Economic Advisory Councils while OECD is an example of an international campaign institution. Examples of national discourse institutions are analytical units in the Ministry of Finance and universities, while analytical units of the Commission and the EU-JPI program, ‘More Years – Better Lives’ are examples of international discourse institutions.
The paper shows that different discourses emanating from policy, campaign and discourse institutions have all pointed in the same direction: the call for working longer. One discourse emphasis that pension systems are economic unsustainable and that pension systems function as disincentives to work. Another discourse, that early retirees have been victims of exclusionary processes that can be handled if employers change their behavior and employability is maintained. These discourses have supported pension and early retirement reforms across Europe.