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One topic hardly mentioned during the last three years of Brexit negotiations is indeed among the most consequential—pensions. This is paradoxical because older British voters, who were more in favour of Brexit than other age groups, are likely to suffer most, as Brexit drives British social policy towards market liberalism and reshapes financialisation in the UK and indirectly across Europe, with considerable implications for pensions and inequality in old age. Bernhard Ebbinghaus discusses three paradoxical implications of Brexit on pension policy in the UK and Europe in a chapter in Whither Social Rights in (Post-) Brexit Europe? Opportunities and Challenges.

Ebbinghaus, Bernhard (2020) “Uncertain Futures of Post-Brexit Pensions: Three Paradoxical Implications”, Matthew Donoghue & Mikko Kuisma (eds.), Whither Social Rights in (Post-) Brexit Europe? Opportunities and Challenges, Berlin: Friedrich Ebert Stiftung (Social Europe), 69-76.

Professor Bernhard Ebbinghaus presented his comparative analysis on reproducing inequalities and poverty risks in old age pension income across Europe at the Finnish Centre for Pensions in Helsinki as part of their ETK Research seminar on Pension reforms, non-standard work and life course inequalities in the OECD.

There has been much discussion recently of pension sustainability, in the face of demographic ageing. But there has been relatively little exploration of whether retirement income is enough for people’s basic needs – and there is growing evidence of an increase in old age poverty in many European countries.

Different pensions systems are in use across Europe – some are not always capable of effectively reducing poverty despite the explicit goal to do so, and some are better suited to reduce poverty. Professor Ebbinghaus’ research finds that the elderly are more at risk of poverty than the working population. The exceptions are some Nordic pension systems such as Finland, a few central European countries as well as the Dutch multipillar system. Overall there is still considerable variation across Europe in the reproduction of income inequality, and poverty risks from working lives into old age retirement income, particularly for social risk groups such as those with non-standard working lives.

Find out how he answered the underlying question: ‘Do you think pension systems should even out the inequalities of labour market?’ in this short YouTube interview.

To find out more:

Ebbinghaus, Bernhard, Kenneth Nelson, & Rense Nieuwenhuis (2019). “Poverty in Old Age” LIS Working Paper Series, No. 777. http://www.lisdatacenter.org/wps/liswps/777.pdf

My analysis of trends in European poverty rates for elderly was covered in The Guardian’s Observer, focusing on U.K. and severe poverty for the population 65 and older. The comparative research paper will be presented at ESA Conference in Manchester on 21 August and ESPAnet Conference in Stockholm on 7 September 2019. Free download of PDF from ResearchGate.

Recent reforms have responded to demographic ageing and fiscal challenges by shifting toward the multipillarisation of pensions to achieve financial sustainability. Reforms towards privatization and marketization of retirement income provision occurred in Britain and Germany with different pension system legacies. While public opinion supports largely the status quo, the stakeholders, in particular, organized capital and labour, have evolved in their positions towards pension reforms. The analysis seeks to draw out how organized interests have sought to influence mulitipillarisation but also adapted their strategies in the context of increasing financialisation in the two political economies. The position of trade unions, employers’ associations, social advocacy groups and the finance sector has increasingly embraced multipillarisation, earlier and more so in Britain than in Germany. A reversal of pension financialisation seems no longer possible but the inequalities and uncertainties need to be addressed in order to make multipillarisation politically sustainable.

Bernhard Ebbinghaus (2019) “Multipillarisation remodelled: the role of interest organizations in British and German pension reforms”, Journal of European Public Policy, online preprint, DOI: 10.1080/13501763.2019.1574875

Privatisierung und Vermarktlichung der Altersvorsorge: Eingetrübte Aussichten des deutschen Mehrsäulenmodells

WSI-Mitteilungen 6/2018, S. 468-475

Innerhalb von 70 Jahren hat die deutsche Alterssicherung einen Paradigmenwechsel vom Bismarck’schen Modell der umlagefinanzierten Rentenversicherung zum liberalen Mehrsäulenmodell vollzogen. Unter den gegebenen fiskalischen Restriktionen und angesichts zukünftiger demografischer Alterung wurde das Ziel einer lebensstandardsichernden Rente auf staatliche und private Säulen verlagert. Die freiwillige kapitalgedeckte Riester-Rente kann die zukünftige Rentenlücke nur unzureichend schließen. Zudem hat die jüngste Finanzmarktkrise auch die Grenzen einer kapitalgedeckten Altersvorsorge aufgezeigt. Und nicht zuletzt bedarf auch die betriebliche Altersvorsorge einer tarifpolitischen Weiterentwicklung, um zukunftsfähig zu sein. Die bisherigen Reformen wappnen nur ungenügend gegen die Risiken steigender Altersarmut in einer flexibleren Arbeitsgesellschaft. Eine bessere Mindestsicherung in der Rentenversicherung und eine breitere Deckung der Zusatzversorgung sind unabdingbar, um eine sozial und politisch nachhaltige Altersversorgung zu erreichen. 

[Preprint]