Pension system reforms in the EU15 countries

The article gives an overview of pension system reforms that have been carried out in the EU15 since the beginning of the 1990s. It first of all briefly describes the main common features that the pension systems share and the basic differences that set them apart within this group of countries, all of which are confronted with the ageing problem and its social and fiscal implications. The paper then presents the main types of reform that have been implemented. Major structural reforms have only been made in a few countries, while the values of the parameters used for calculating pension rights have been revised and reforms made to public sector workers’ pension schemes practically everywhere. The way in which the reforms have been carried out in the countries that seemed to offer interesting case studies – Germany, the Netherlands, France, Sweden, Italy and Austria – is also examined. Following these reforms, several countries seem to have managed to contain the growth of their expenditure on pensions. In others, an explosion of pension costs may well be likely in the absence of any policy change. Lastly, a middle-range group seems to have already gone ahead with reform measures limiting the increase in pension costs, but not thoroughly enough to avoid a big rise in these costs. Replacement rates have meanwhile converged, or will soon converge, within the EU15. So, countries where these rates were lowest have higher post-reform replacement rates than they had before, while the countries that had high replacement rates have conducted sometimes substantial reforms which have brought these ratios down.