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From Public Pension to Private Savings: The Current Pension Reform Process in Europe

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  • Börsch-Supan, Axel

    (Munich Center for the Economics of Aging (MEA))

Abstract

Reforms of the public pension systems are on top of the European policy agenda. Current costs are high, and the pressures will increase due to population aging and negative incentive effects. This paper describes the causes of the current pension problems and the cures required to make the pay-as-you-go public pension systems in Continental Europe sustainable. There is no single policy prescription that can solve all problems at once. Reform elements include a freeze in the contribution and tax rates, an indexation of benefits to the dependency ratio, measures to stop the current trend towards early retirement, an adaptation of the normal retirement age to increased life expectancy; and more reliance on private savings – elements of a sustainable but complex multipillar system of retirement income provision.

Suggested Citation

  • Börsch-Supan, Axel, 2004. "From Public Pension to Private Savings: The Current Pension Reform Process in Europe," MEA discussion paper series 04050, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    • Handle: RePEc:mea:meawpa:04050
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    References listed on IDEAS

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    1. David M. Cutler & Louise Sheiner, 1998. "Demographics and Medical Care Spending: Standard and Non-Standard Effects," NBER Working Papers 6866, National Bureau of Economic Research, Inc.
    2. Borsch-Supan, Axel & Schnabel, Reinhold, 1998. "Social Security and Declining Labor-Force Participation in Germany," American Economic Review, American Economic Association, vol. 88(2), pages 173-178, May.
    3. Börsch-Supan, Axel & Reil-Held, Anette & Christina Benita Wilke, 2003. "How to make a Defined Benefit System Sustainable: The Sustainability Factor in the German Benefit Indexation Formula," MEA discussion paper series 03037, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    4. Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1.
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    Cited by:

    1. Renáta Pitoňáková, 2018. "Private Sector Savings," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 1, pages 1-17, March.

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    JEL classification:

    • Z00 - Other Special Topics - - General - - - General

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