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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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10 Conclusion

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During the Golden Age of the welfare state, politicians were in the position to continuously expand social security benefits: The coverage of social security programs was extended to more and more beneficiaries, benefits were increased, and new programs were introduced. Since the ‘dismantling’ of the welfare state, which entails introducing social security cutbacks for the public, politicians’ own welfare has become controversial, even though (or rather because) the topic of MPs’ pensions is not a matter of welfare state retrenchment but actually accountability. That is because MPs in representative democracies do not only decide on public social security reforms; they are also in the privileged position to decide on their own financial well being. According to public opinion, the political class is greedy and tends to make self-serving decisions in their own interests. Thus, it is all the more surprising that MPs retrenched their own pension benefits in recent years. For that reason, this study sought to answer why, when, and how MPs introduced self-imposed pension benefit reductions. As such, the politics of parliamentary pensions in four OECD countries, Australia, Austria, Canada, and Germany was analyzed and compared.

MPs in Austria and Australia closed the special parliamentary pension scheme and integrated their pension provisions into the public pension insurance, or aligned it with the government employees’ pension plan. Thus, both countries implemented structural reforms and pursued a policy of harmonizing public and parliamentary pension provisions. In contrast, MPs in both Canada and Germany retrenched major parameters...

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