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Welfare Reform on the Web (May 2008): Pensions - overseas

Flexicurity in Bismarckian countries? Old age protection for non-standard workers in Belgium

H. Peeters and others

Journal of Social Policy, vol. 37, 2008, p. 125-143

Flexicurity has become a new buzzword among European social policy analysts. It points towards a strategy of combining labour market flexibility with an adequate level of social security. Social protection in Bismarckian welfare states such as Belgium is dependent on people working full-time without interruption over most of the life course. This is exactly what part-time and temporary workers cannot do. This article explores the extent to which the Belgian old age pension system has been adapted to meet the needs of growing numbers of non-standard workers. The Belgian pension system is made up of three pillars:

  1. the national state pension financed on a pay-as-you-go basis
  2. occupational pensions
  3. private savings.

The research suggests that part-time employment leads to a lower state pension entitlement, while career breaks and temporary unemployment do not. Non-standard workers are discriminated against in relation to occupational pensions, but do not appear to compensate through higher levels of private saving.

Old-age pensions in Spain: recent reforms and some of their consequences for the risk of poverty

S. Sarasa

Social Policy and Administration, vol. 42, 2008, p. 197-210

Since the mid-1980s the state pension system in Spain has been subject to successive reforms. The 1985 reform tightened terms of eligibility for disability pensions, which had been used as an alternative to early retirement. It also made it more difficult to gain access to contributory retirement pensions, by increasing the minimum number of mandatory annual contributions from 8 to 15, of which two had to have been paid in the last eight years before retirement. In addition, the number of annual salaries used to calculate the pension was increased from 2 to 8, thereby effecting a reduction in income replacement rates. Finally, salary increases ceased to be used as a benchmark for pensions and were replaced by the Bank of Spain's RPI forecast. If inflation is higher than this benchmark, compensatory payments are only transferred to the minimum pensions. In this way containing the growth of higher-value pensions has reduced their income replacement rate for higher-income employees. In parallel with these reforms, a universal right to a minimum level of income was established through the setting up of non-contributory pensions, and fiscal incentives were introduced to encourage private pension schemes. Thus income maintenance in retirement for the better-off depends more on their private savings. The selective uprating of pensions on the basis of the Bank of Spain's RPI forecast has harmed those workers who had paid into the contributory pension scheme longest, by reducing their income replacement rate over time.

Private pensions versus social inclusion? Non-state provision for citizens at risk in Europe

T. Meyer, P. Bridgen, & B. Riedmuller, (editors)

Cheltenham: Edward Elgar, 2007

This book provides an overview of the different policy approaches to pensions provision for those people who may not be adequately provided for otherwise, with detailed case studies of the British, Dutch, Swiss, German, Italian and Polish systems. A concluding chapter looks at the impact of different systems of provision. Includes a detailed bibliography at the end of each chapter.

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