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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 New Pension Mix in Europe. Inequality and Two Further Risks (David Natali)

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CONCLUSION

The New Pension Mix in Europe

Inequality and Two Further Risks

David NATALI

Introduction

This concluding chapter aims to provide a summary of reforms in Europe in the wake of the Great Recession, along with some insights concerning the main present and future risks for the pension mix in Europe.1 It thereby addresses the three main questions at the core of the book: what are the key traits of 21st century pension systems across Europe?; how sustainable are the reformed systems?; and, are social partners and trade unions seeing a decline in their role in pension politics?

As regards the reforms passed in the recent years, the chapters above have shown that, especially in the countries most hit by the crisis, pension systems have seen the emergence of new traits. While cost-containment is often the key trait of the reform record, three main novelties should be stressed: the increase of pensionable age has become a key measure to improve the financial viability of pensions, while increasing benefits (at least for those with a long career); cutbacks have been implemented with short phase-in periods (if any) and through automatic mechanisms to link key parameters (e.g. pensionable age, indexation) to increasing life expectancy; and supplementary pension funds have been at the core of the reform effort, and some of those countries that set up a multi-pillar pension system in the 1990s have reverted to the...

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