Pension Security in the 21st Century: Redrawing the Public-Private Debate

Pension Security in the 21st Century: Redrawing the Public-Private Debate

Pension Security in the 21st Century: Redrawing the Public-Private Debate

Pension Security in the 21st Century: Redrawing the Public-Private Debate

Synopsis

Future pension provision is highly controversial; it juxtaposes the challenges of old age security with the exigencies of global finance. Clearly, demography, finance and public accountability are crucial to current political debate. But there are other important issues. The problems of paying for the retirement of the baby boom generation has exposed profound differences in the advanced economies in terms of their financial institutions and infrastructure. Pension security has been re-conceptualized in part as an issue of global finance and international comparative advantage bringing with it a re-definition of risk and pension security. This book examines how major continental European and Anglo-American countries are dealing with these pressures, to what extent these responses are beginning to redraw the boundaries between public and private responsibility for pension security and what the implications of public-private partnerships are for the financial organization and infrastructure of European and global financial markets and the nation-based welfare state. The contributors all involved in policy development in their respective countries, assess the comparative strengths and weaknesses of recent pension initiatives in the light of continuing fiscal constraints and current market instabilities. Using a tight comparative framework, the book questions assumed divisions between states and markets, as new divisions between public and private spheres of pension responsibility require new regulatory machinery to guarantee future security. This book provides a vital reference point in understanding pension security in the 21st century for academics and postgraduates in the social sciences, economics and finance, geography, politics and social policy, policy makers in OECD countries and industry professionals.

Excerpt

In the years immediately after 1945, pensions and social security formed a relatively stable component of social policy and political economy. This stability fostered the academic classification of welfare states into categories that reflected degrees of social redistribution and types of protection characterised by national systems. Over the 1990s, however, this analytical logic was thrown into question. Repeated concerns were raised about the capacity of state pension schemes to accommodate the retirement of the baby-boom generation from 2010. Issues of demography and finance have ruptured the previously isolated sphere of social welfare. Pension security is more fragile than hitherto believed, even though many academics in social policy and across the social sciences remain convinced that national welfare states are sacrosanct and deeply embedded in the collective consciousness of nation-states.

In Europe, doubts about the capacity of nation-states to fund the retirement of the baby boom generation have brought these issues to a head. Following Maastricht and European Monetary Union, EU member states have sought to restructure welfare, to contain future public obligations, focusing specifically on state pensions—thereby provoking alarm within the EU about the future provision of sustainable retirement income. Pay-As-You-Go (PAYG) state-sponsored social security appears unable to meet public expectations and future burdens, when compared to pension systems that rely upon a mix of partially funded public and fully funded private provision. This brings into focus distinctions between (for example) continental European traditions and the institutions and principles underpinning Anglo-American social security and funded supplementary systems.

Such gross distinctions conceal much variability between countries within categories and commonalities between countries from different categories. There are, for example, significant differences between

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