Politically Dominant but Socially Flawed: Projected Pension Levels for Citizens at Risk in Six European Multi-Pillar Pension Systems

The development of pension policies in industrialized nations has in recent years been dominated by ‘multi-pillarism’ as a political goal. In perhaps no other area of social policy have policy-makers, economists and academics been in such strong agreement over the necessary course of action: highly industrialized, ageing societies cannot provide reliably for retirement solely by financing pay-as-you-go systems, controlled by the state; instead they must introduce pre-funded elements and strengthen private savings. In Europe the power of this ‘pensions orthodoxy’ is most clearly visible in countries whose Bismarckian or socialist legacy left little room for non-state, pre-funded pensions: Italy, France and Germany, Poland, the Czech Republic and Hungary. However, all of these have recently turned towards multi-pillar regimes which are believed to be financially more sustainable and robust.