Supplementary Pensions between Social Policy and Social Regulation

Abstract: The European Commission has developed an analysis of supplementary pensions which constructs the policy area as regulatory by separating 'allocative' issues, such as smoothing lifetime income and promoting saving, from traditional 'redistributive' or 'budgetary' welfare concerns, such as ensuring an adequate minimum income. In the allocative sphere, it promotes market-oriented values, notably 'actuarial fairness'. However, the progress of European measures on supplementary pensions is impeded by alternative approaches. The social partners play a large role in regulating supplementary pensions, and they provide an approach to regulation that is antagonistic to the adoption of common EU rules. Member states might be expected to view EU-level regulatory activity more favourably as providing a lever for pension reforms, but several states which had already embarked on substantial changes to their pension systems did not welcome EU-led reforms.