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The Development of Occupational Pension Markets in the European Union and in Lithuania: Regulation and Challenges
Abstract
This chapter examines occupational pension market regulation and dynamics at the European Union level and in Lithuania. Over the last few decades, the diminished role of the state in the pension welfare market and corresponding legislation has favoured self-regulation. Beyond the debate and policy recommendations concerning the interaction between mandatory pension guarantees and complimentary pensions, the chapter also draws attention to the problems of the occupational pension market at the European Union level by analysing regulatory and other incentives for welfare market actors. Bitinas further examines why the development of occupational pension provision in Lithuania is limited and provides policy recommendations to enhance it.
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There are number of reasons for the adoption of new pension systems in Europe, but the most important of these are, no doubt, big and rising fiscal deficit and the demographic challenges faced by most countries. Both of these emphasize that changes in pension system should not be only cosmetic, like adjustments in retirement age or adjustments in level of pension. The change should be fundamental one, change in predominant paradigm which is fundamental to welfare state pay-as-you-go system and social security system.
This chapter draws conclusions about Occupational Welfare (OW) in Europe,
discussing its main traits and describing how it has evolved in selected countries since
the 1990s and especially in more recent years. In line with the research questions put
forward in the introductory chapter, we first look at the role of OW in the nine
countries under scrutiny in the volume: Austria, Belgium, Germany, Italy, the
Netherlands, Poland, Spain, Sweden and the UK. The first section sketches how OW
has evolved over time, addressing its capacity to protect workers against ‘new’ and
‘old’ social risks. While the analysis focuses mainly on the two policies under scrutiny
in this book (pensions and unemployment protection), we use information on other
policy fields – such as health insurance and reconciliation of work and family life –
that have been studied elsewhere.
Section two focuses on the main traits of occupational social security schemes: we
consider the institutions – social partners and enterprises as well as the state and
financial players – involved in OW governance in Europe. We also look at the
distributive outcomes of occupational schemes, providing information on the extent to
which different types of OW arrangements can increase social inequalities. The second
section also glances at the main triggers for the recent development of OW, testing
some of the hypotheses proposed both in the introductory chapter and in some of the
country chapters. The third and last section addresses some policy implications for
social partners and policymakers, enabling them to manage the obvious risks while
seizing apparent opportunities.
Mandatory pension participation in the Netherlands is currently under review. This article examines the manner in which the system of mandatory participation in sectoral pension funds is presently organised as well as future proposals from the perspective of the freedom to provide services. It also briefly reviews mandatory participation in Belgium, Denmark, Germany, France and Sweden and asks whether it constitutes a barrier to the freedom enshrined in Article 56 TFEU. Restrictions of this freedom in the field of mandatory participation are too easily excused in the Netherlands by pointing to decisions by the European Court of Justice (ECJ) in which it judged the system to be permissible. These decisions, however, were made from the perspective of competition law, and not on the basis of Article 56 TFEU. Grounds for justifying restrictions to this freedom exist, although different justifications are available for direct and indirect discrimination. The article questions how mandatory participation in the Member States considered in this article fare from this perspective?
The introductory chapter discusses the need for studying the changing public-private pension mix and the governance and regulation of private (occupational and personal) pensions. Public pension systems with pay-as-you-go financing have not only come under pressure due to demographic and socio-economic changes but also the recent financial crisis has challenged funded private pensions. Mapping the main features of the public- private pension mix of the selected ten European countries, the chapter gives an overview of the content of the country chapters, drawing some lessons from their varied experiences. The introduction also sketches the main topics of the three comparative studies on the changing public-private pension mix, the varieties of pension governance and regulation as well as the poverty and inequality patterns emerging from the different pension systems.
VIEÐOJI POLITIKA IR ADMINISTRAVIMAS • 2006. Nr. 17 Ávadas Ar nacionaliniai socialinës politikos mode-liai, dar þinomi kaip gerovës valstybiø modeliai, iðlieka globalizacijos ir europeizacijos eroje? Pla-èiai paplitusi nuomonë, kad ekonominë globali-zacija vienodina gerovës valstybes maþindama so-cialinës apsaugos reikðmae ir jos finansavimà [1, p. 183]. Globalizacija ir europeizacija nëra tas pats. Ar ðiuolaikiniame pasaulyje dar lieka vie-tos "socialiniam pradui"? Ar socialinë apsauga yra jau beiðnykstanti sritis? Jeigu maþëja nacionaliniø gerovës valstybiø modeliø reikðmë, kaip tai veikia globalinae socia-linae politikà? Ar gerovës valstybë gali egzistuoti ne nacionalinës valstybës lygiu? Egzistuoja nuo-moniø, kad globali socialinë sistema gali bûti ver-tinama kaip "pasaulio visuomenë", pasiþyminti nekontroliuojama dinamika ir socialine integra-cija. Globaliu lygiu nëra valstybës, kuri atliktø socialinës apsaugos arba socialinës integracijos darbà. J. Meyeris ir kt. kalba apie "nevalstybinae pasaulio visuomenae" [2, p. 144–181], kuriai bû-dinga tai, kad susikûrë tarptautinës socialinës po-litikos formos, pavyzdþiui, Europos Sàjunga. Tuo paèiu metu Rytø Azijoje, Rytø Europoje ir Lo-tynø Amerikoje susikûrë "naujosios nacionali-nës gerovës valstybës". L. Leiseringas teigia, kad nacionalinë valstybë yra ne antimodelis, bet pa-saulio visuomenës dalis, "pasaulinë institucija". Naujø gerovës valstybiø iðplitimas gali bûti verti-namas kaip gerovës valstybës globalizacijos reiški-nys [1]. Daugeliu atvejø vadinti naujàsias valsty-bes naujomis gerovës valstybëmis dar gali bûti ankstoka, nes, nepaisant nemaþos ekonominës sëkmës, jø socialinë raida yra dar gana þemo ly-gio. Netgi aukštesnio išsivystymo šalys, pavyzdþiui, JAV ir Airija, kelia tam tikrø abejoniø dël gali-mybës taikyti visuotinës gerovës valstybiø termi-nà. Uþuot taikius terminus "visuotinës gerovës valstybës" ar "visuotinës gerovës modeliai", moks-liškai korektiškiau taikyti socialinës apsaugos ar-ba socialinës politikos modeliø terminus. Ðiame tyrime keliami uþdaviniai apþvelgti Socialinës politikos modeliavimas Europos integracijos procese*
The increasing relevance of occupational pensions for the income security of the elderly moves this policy area to the core of the tension between national redistributive welfare states and EU-wide single market regulations. Focusing on the European pension fund directive, the paper investigates whether European occupational pension policies are primarily shaped by the Commission’s and international business’ agenda of market liberalization or the governments’ preferences for national autonomy in social policy. The study finds that the Directive liberalizes the pension market to some extent. Member states largely succeeded in securing the national prerogative in social policy. In explaining this outcome the paper argues that the nature of domestic pension arrangements does not only shape government preferences but also the preferences of the European Parliament and important business actors. Business was too fragmented internally to succeed in establishing a full blown liberal Europe in regard to occupational pensions, although their pressure was sufficient to secure liberal investment principles.
The objective of this paper is to examine and analyze empirically whether the Central and Eastern Europe countries` reformed pension systems are providing adequate and safe pensions. Starting in 1990s, most Central and Eastern European countries radically reformed their pension systems. The rising optimism initiates many studies where the advantages of the reforms were in the focus.
The global financial crisis negatively affects the reformed pension systems. As a response, the policy makers in few of those countries decided to set up different measures: increasing or reducing the pension contribution for alleviating the fiscal deficit or encouraging the employment, adapting the contribution rate and allowing individuals to switch back to the old system. These last changes in the pension systems have triggered the following question: How much and in which way the implementation and experiences gained with the functioning of the reform pension system will have impact in the future pension adequacy and sustainability of the pension system?
This article takes a step back from the debate on the precise causes of the crisis and the detailed steps needed to resolve
it. It focuses on distributional issues and discusses the ways in which widening income inequality in most European countries
has been linked to factors that lie behind the crisis. It then considers distributional effects of current efforts to resolve
the crisis and explains why crisis-resolution policies need to address distributional concerns. Finally it proposes measures,
many of which require coordination at least at the European level, to address the distributional crisis that otherwise awaits
us in coming years and that will ultimately help to establish a new, more economically and socially balanced growth model.
This article offers a reflection on how integrating fiscal welfare into welfare state research can shed light on some subtle, yet important, transformations of welfare states and social citizenship in Europe. We begin by clarifying the concepts of fiscal welfare and social tax expenditures (STEs), by reviewing and critically assessing the various related concepts found in the literature. We also map out the empirical knowledge currently available, highlighting the limitations in the available data. Then, drawing on both existing knowledge (developed especially in the context of the US welfare state) and the emerging literature on fiscal welfare in Europe, we identify a number of trends and set out some hypotheses as to why tax expenditures have become a privileged instrument in the field of social policy: not only do STEs appear as a useful instrument to build consensus across party lines in a context of budgetary austerity and strong control of public expenditures, they also enable the discreet privatization of social insurance schemes. Fiscal welfare also allows for a new mode of governing social policy through incentives, which entails a different mode of redistribution than traditional social policy instruments. Finally, we identify the remaining empirical and theoretical gaps to guide future research on the subject.
This new edited volume on occupational welfare in Europe is based on research projects coordinated by the European Social Observatory (OSE) It focuses on recent developments in the field of pensions and unemployment-related schemes in nine countries: Austria, Belgium, Germany, Italy, the Netherlands, Poland, Spain, Sweden and the UK.
The book addresses the main analytical and methodological shortcomings in the contemporary literature and flags the main policy implications for trade unions in the light of the spread of Occupational Welfare across the European Union. Both the case studies and the comparative conclusions address the challenges trade unions face in terms of Occupational Welfare a subject that the authors feel, needs to be handled with care.
The article provides an assessment to what extent reforms of occupational pensions (OP) have fostered a “risk shift” or increased social protection dualism across countries. The essay focuses on workers, whilst previous research primarily analyzed provision for current pensioners. The empirical analysis confirms that in countries such as the Netherlands and Sweden, increased private pension or (OP) provision does not necessarily lead towards social protection dualism and comprehensive risk shifts. Britain continues to be characterized by strong social protection dualism and entrenched social divides, creating “social policy enclaves”. Divisions of welfare are also very likely to be a feature of the German pension system in the future. The latter two countries have witnessed clear risk shifts and processes of dualization. The pension systems in Austria, Italy, and Spain have not witnessed paradigmatic changes, and continue to be primarily based on public/statutory pension schemes. The idea that multi-pillarization in itself fosters major risk shifts and dualization has to be reconsidered. Under specific conditions, encompassing OPs can be functionally equivalent to public pension schemes. However, countries relying on voluntarism with regard to OPs coverage tend to witness processes of dualization.
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