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The Politics of Parliamentary Pensions in Western Democracies

Understanding MPs’ Self-Imposed Cutbacks

Anna Caroline Warfelmann

The author takes a close look at the politics of parliamentary pensions in Australia, Austria, Canada, and Germany and enlightens the reasons of self-imposed cuts by Members of Parliament. Members of Parliament in western democracies have been under growing pressure since they legislated first retrenchments of national social security systems. They are in a special situation because they have to decide about their own financial situation as well. Thus, it is surprising that they cut their own pension benefits in recent years. The book shows that the self-imposed cuts by Members of Parliament were related to public pension reforms but, in general, were less substantial.
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9 The Politics of Parliamentary Pensions in Australia, Austria, Canada, and Germany

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Politicians have come under growing pressure since they legislated the first retrenchments of national social security systems. MPs are in a special situation because they implement benefit cuts for public schemes and at the same time must decide on their own financial situation. Generally, MPs’ pay and pensions have always been a source of mistrust and skepticism in the public, as representatives have often been accused (fairly or unfairly) of using their power to line their own pockets. As a matter of fact, MPs have introduced changes to their own pension benefit levels as well. This chapter compares the politics of parliamentary pensions in two European countries (Austria and Germany) and two Anglo-Saxon countries (Australia and Canada). MPs in all four OECD countries were covered by a special parliamentary pension scheme before reforms were introduced. While Austria and Australia terminated their special scheme and harmonized MPs’ pension arrangement with the public pension scheme and the civil servants’ pension plan, respectively, Canada and Germany introduced parametric reforms and implemented cutbacks within the special parliamentary pension scheme. Thus, MPs in Australia, Austria, Canada, and Germany have legislated their own pension benefit cutbacks during recent years. The analysis of parliamentary pension politics, especially the questions of why, when, and how MPs introduced parliamentary pension cutbacks were answered in detail in the country-specific chapters. This chapter compares the findings of the country studies. What similarities and differences can be identified with the politics of parliamentary pensions in these different case studies?

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