Understanding MPs’ Self-Imposed Cutbacks
5 Reforming Parliamentary Pensions. Evidence from Germany: Gradual Decline
German members of parliament have been covered by a special parliamentary pension scheme since 1968. This scheme includes only parliamentarians. Structural similarities to the civil service pension scheme were instituted when the parliamentary scheme was reformed in 1976. However, both pension systems are separate. In recent decades, parliamentarians implemented several parliamentary pension cutbacks (in 1989, 1995, 2004, 2007, and 2014), which scaled back basic parameters of the parliamentary pension scheme but did not change the nature of the special pension scheme.
To fully understand the special parliamentary pension scheme unique to MPs and its relationship to the public pension reforms, the arrangement of the German welfare state and the design of public old-age pensions are first discussed. The work and financial compensation of German Bundestag members is briefly described to embed parliamentary pension allowances in the overall financial income package granted to MPs.
5.1.1 Public Old-Age Pensions and the German Welfare State
Germany is a prototype of the Bismarckian welfare state and is characterized by the social insurance principle. Several countries, such as Austria, France, and Belgium, adopted the German model of social insurance, and that is why the country is described as a “pioneer” (Hegelich & Meyer 2008) and the “mother of statutory insurance” (Schulze & Jochem 2007). Under this system, social security benefits enable individuals to maintain their standard of living, which is the objective of Bismarckian welfare states. Another central characteristic of Bismarckian welfare states...
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