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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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The Netherlands. The Challenges Posed by the Unintended Universal Financialization of Retirement Provision (Johan De Deken)

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The Netherlands

The Challenges Posed by the Unintended Universal Financialization of Retirement Provision

Johan DE DEKEN

Introduction

The Dutch multi-pillar pension system is often presented as successfully accomplishing social and financial sustainability, by combining PAYG with funding, and by including most wage earners through a system of indirect mandating. It is a system that has infused elements of solidarity and collectivism into what are formally private agreements. With the advent of two financial crises (2000 and 2008), this system has come under severe constraints and has entered a process of radical change. The first section gives an overview of how the architecture of the system has changed during the past decade. The second section assesses to what extent recent reforms have consolidated or undermined the social and financial sustainability of the Dutch pension regime. It focuses in particular on the intended and unintended effects of a strategy based on the universal financialization of the second pillar. The final section discusses the changing role of trade unions in the governance of the system. It analyses how a shift towards technocratic decision-making has undermined what formally is still a prime example of a co-determined mode of governance.

1.  The transformation of Dutch pensions

1.1  The basic architecture of a corporatist multi-pillar system

The Dutch pension system is often considered to be a prime example of multi-pillarism (Ebbinghaus, 2011). One can distinguish three pillars: a...

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