Chapter

Europe’s Transformations Towards a Renewed Pension System

Bernhard Ebbinghaus

in The Politics of the New Welfare State

Published in print October 2012 | ISBN: 9780199645244
Published online January 2013 | e-ISBN: 9780191745119 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199645244.003.0009
Europe’s Transformations Towards a Renewed Pension System

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Pension systems have been, and continue to be, the largest part of social protection spending, not least due to demographic ageing. Given ‘blame avoidance’ strategies of politicians, there is not much opportunity for a ‘new’ welfare system with respect to the entrenched policy area of pensions. However, many changes have altered the welfare system for the elderly towards a more privatized, partly funded, less secure and more delayed income support in old age. Adopting a comparative perspective, the chapter discusses four transformative changes in pension systems across Europe that considerably alters the welfare system for the elderly. First, the shifts from public to private responsibility are discussed. Second, the variations in pension fund capitalism are compared as is the differential impact of the recent financial crisis. Third, a paradigm shift also occurred through attempts to reverse the trend towards early retirement and the postponed exit from work. Fourth, the increased reliance on employment-related or defined-contribution benefits will increase the risk of poverty and increase inequality in old age, given the new social risks concerning employment chances. The retreat of the state from its old age protection goal may increase the pressures for its increased role in securing and regulating old age income provision in old age.

Keywords: Europe; pension reform; funded pensions; early retirement; poverty; public-private mix

Chapter.  9377 words.  Illustrated.

Subjects: Political Economy

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