Editorial
| Author | Francis Kessler |
| DOI | 10.1177/138826270500700301 |
| Published date | 01 September 2005 |
| Date | 01 September 2005 |
| Subject Matter | Editorial |
EDITORIAL
As the annual MISSOC
1
surveys show, many retirement reforms have been introduced
over the last five years in the Member States of the European Union. All Member States
are having to reform their pension schemes, although they are doing so in different
ways.
Overall, it is possible to distinguish between the reforms undertaken in the fifteen
‘old’ Member States and the reforms undertaken in the ten ‘new’ Member States,
which became members of the Union in 2004. Many of these States carried out
comprehensive and radical reforms of their pension schemes in the 1990s. As a result
of introducing a market economy, and out of financial necessity, these countries
rejected their previous pension arrangements and adopted, often with technical
assistance from the World Bank and the IMF, a ‘three-pillar’ structure – a basic pay-as-
you-go scheme managed by, or in the name of, the state, together with two types of
privately-funded schemes, one of which is compulsory while the other is not. For
historical, political and demographic reasons, the new pension arrangements differ
greatly from one Member State to another. There is no particular need to reform these
pension systems again and finding solutions to implementation problems is probably
more important. However, some of these States have announced ‘reforms of reforms’,
particularly in regard to supplementary capitalisation pension schemes.
Some very radical changes in the basic pension provisions of the old Member States
were also introduced in the 1990s. The general trend is clear - it is generally agreed that
spending on existing basic pensions arrangements must be reduced. Basic pensions are
considered too costly for the state and, in countries where they are financed mainly by
contributions, they are also considered too costly for businesses competing in the
world market. Sweden and Italy both introduced so called ‘notional account systems’
and Austria adopted this approach in its recent reforms in 2004. However, all the other
‘old’ Members States opted for so called ‘parametric reforms’, making changes to the
existing pension formula but not replacing it with a different formula. The
establishment of large publicly controlled ‘buffer funds’ in the earnings-related
systems by accumulating resources during periods when the climate is favourable for
use during periods when the climate is favourable and there is an imbalance between
contributions and benefits has also being considered as a means of sustaining pension
schemes. The so called ‘United States solution’, in which the accumulated capital is
destined to disappear as the difficulty subsides, was adopted in Portugal, in the Fundo
European Journal of Social Security, Volume 7 (2005), No. 3 193
1º proef
1
http://www.europa.eu.int/comm/employment_social/social_protection/missoc_en.htm
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