EUROPEAN PAPERS ON THE NEW WELFARE

The Political Economy of State-Based Pensions: A Focus on Innovative Reforms

6. Conclusion

Facing up to the challenge of population ageing can be overwhelming for political leaders. For the developed world, the ratio of pensioners to the working age population is set to double over the next half century. Such a dramatic shift toward an older population will not occur without difficulty. Among the many challenges will be maintaining a political and economic balance between adequate retirement provision and an affordable pension contribution rate.
Two decades ago, the political prospects for addressing the pension challenge looked bleak. But in the last fifteen years, many countries have put in place reforms that have improved the long-term outlook, even if modestly. While much more reform undoubtedly lies ahead, the successful implementation of innovative approaches to state-run pensions in several countries should increase our optimism about the political prospects of addressing the remaining challenge.

References
Australia
Australian Commonwealth Treasury to the Australian Senate Select Committee on Superannuation (2002): “Inquiry into Superannuation and Standards of Living in Retirement”, Submission by the Australian Commonwealth Treasury to the Australian Senate Select Committee on Superannuation, July.

Carey, D. (1999): “Coping with Population Ageing in Australia”, Organization for Economic Co-Operation and Development, Economics Department Working Paper, No. 217, OECD Publications, Paris Cedex.

Rothman, G.P., Retirement and Income Modelling Unit (1998): “Projections of Key Aggregates for Australia’s Aged”, Commonwealth Treasury, Paper for the Sixth Colloquium of Superannuation Researchers, University of Melbourne, Conference Paper 98/2, July.

Sass, S.A. (2004): “Reforming the Australian Retirement System: Mandating Individual Accounts”, Global Issue Brief #2, April, Center for Retirement Research at Boston College, Boston.

Canada
Canada Pension Plan Investment Board (2007): “Financial Highlights”, Canada Pension Plan Investment Board, www.cppib.ca/Results/Financial_Highlights/ (last accessed July 2007).

Kent Weaver, R. (1999): “The Politics of Pension Reform in Canada and the United States”, Center for Retirement Research at Boston College, Working Paper 1999-04, November.

Office of the Chief Actuary (2004): Actuarial Report (21st) on the Canadian Pension Plan, Office of the Chief Actuary, Office of the Superintendent of Financial Institutions Canada, November, 18.

Germany
Börsch-Supan, A.H., Reil-Held, A. and Wilke, C.B. (2003): “How to Make a Defined Benefit System Sustainable: The ‘Sustainability Factor’ in the German Benefit Indexation Formula”, October, Mannheim Institute for the Economics of Ageing, Mannheim.

Börsch-Supan, A.H., Reil-Held, A. and Wilke, C.B. (2004): “Reforming the German Public Pension System”, Paper for the 2004 General Assembly of the Japan Pension Research Council, September.

Japan
Sakamoto, J. (2005): “Japan’s Pension Reform”, Social Protection Discussion Paper Series, No. 0541, December, The World Bank, www.worldbank.org/.

Sweden
National Social Insurance Board, (2005): The Swedish Pension System Annual Report.

Settergren, O. (2001): “The Automatic Balance Mechanism of the Swedish Pension System”, National Social Insurance Board, August 20.

Settergren, O. (2004): “New Use of an Old Italian Invention: The Double Entry Bookkeeping Used to Monitor and Secure Financial Stability of the New Swedish Pay-As-You-Go Pension Plan”, Paper Presented at the International Workshop on The Balance Sheet of Social Security Pensions, November, Tokyo.


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