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The New Pension Mix in Europe

Recent Reforms, Their Distributional Effects and Political Dynamics

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Edited By David Natali

This book – based on a research project carried out by the Observatoire Social Européen asbl, with the financial support of the European Trade Union Institute (ETUI) – looks at the most recent developments in pension policy and politics in Europe and advances our understanding of the field in three respects: firstly, it contributes to improve our knowledge of the most recent reform wave passed in the wake of the recent economic and financial crisis; secondly, it assesses the long-term financial and social sustainability of pensions; thirdly, it analyses the politics of pensions and the way policymakers and stakeholders interact in order to address the major challenges to pensions.

The evidence proposed by six country chapters (about Italy, France, Finland, Poland, the Netherlands and UK) and three more transversal chapters (about the role of the EU, that of trade unions in pension reforms, and the main challenges to pension systems in Europe) proves that pension systems have been altered in the wake of the recent crisis. The more evident changes have consisted of: the halt – at least in some countries – of the spread of private pension funds; the improvement in the financial viability of the systems paralleled by more evident risks for the future adequacy of pension benefits; and the alteration of pension politics with the risk of the progressive marginalisation of the trade union movement. In many countries, reforms have been passed without any major social concertation, while the European Union (EU) has had a more evident influence, especially in the countries hit most by the crisis. As a consequence of these trends, we see the emergence of a "new" pension mix in Europe, with new institutional settings, and new challenges.

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Instability Despite Consensus. The Reversal of Private Pensions in Poland (Igor Guardiancich)

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Instability Despite Consensus

The Reversal of Private Pensions in Poland

Igor GUARDIANCICH

Introduction

Since the fall of the Iron Curtain in 1989, old-age social insurance has been almost constantly on the agenda of Polish policymakers. It has followed a “modernization” path that closely resembles, both in process and outcome, that of several Continental Western European countries, which departed from their Bismarckian roots and entered an “age of dualization” at the beginning of the 21st century (Palier, 2012; Emmenegger et al., 2012).

Given the severe mismatches between the skills of workers employed during socialist times and the needs of a market economy, Poland embarked on a labour-shedding path in the early 1990s, which soon exposed its retirement system to growing fiscal imbalances. Since then, dualization has been swiftly introduced through labour market reforms that have thoroughly liberalized flexible types of employment (Poland ranks among the EU Member States with the highest share of fixed-term contracts). Standard Employment Relationships (SERs) are now often denied to the young, the unskilled, and women.

Moreover, the perpetuation of the insider–outsider cleavage in social policy has happened, in primis, through the radical 1999 pension reform (called “Security through Diversity”) that replaced the unsustainable mono-pillar PAYG system with a second generation multi-pillar design. This entirely individualizes pension benefits through the two defined-contribution tiers (one PAYG, one funded) that constitute the compulsory part of Polish retirement insurance, a proper path-switch in...

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