Munich Personal RePEc Archive Pension systems in 27 EU countries Poteraj, Jarosław The Association of Polish Scientists of Lithuania September 2008 Online at https://mpra.ub.uni-muenchen.de/31053/ MPRA Paper No. 31053, posted 22 May 2011 18:36 UTC Pension Systems in 27 EU Countries To my daughters … Pension Systems in 27 EU Countries Jarosław Poteraj The Association of Polish Scientists of Lithuania Vilnius, 2008 Published by: The Association of Polish Scientists of Lithuania (Lithuanian: Lietuvos Lenkų Mokslininkų Dragugija, Polish: Stowarzyszenie Naukowców Polaków Litwy) LT-2001 Vilnius, Lithuania Naugarduko Street 76, Polish Culture’s House, Room 304, http://www.snpl.lt/ First Edition, 2008 Reviewed by: Professor Tadeusz Szumlicz Ph. D., Warsaw School of Economics, Warsaw (Polish: Profesor dr hab. Tadeusz Szumlicz, Szkoła Główna Handlowa, Warszawa) and Professor Ona Gražina Rakauskienė Ph. D., Mykolas Romeris University, Vilnius (Lithuanian: Profesorė habil. dr. Ona Gražina Rakauskienė, Mykolo Romerio Universitetas, Vilnius) Editorial Staff: Jaroslav Volkonovski (Head), Barbara Adamiak, Barbara Dwilewicz (Secretary), Marek Jadczak © Copyright by: Jarosław Poteraj, Łomża, Poland Design: Marek Jadczak Photos on the cover: University of Vilnius, Skarga Courtyard and the Facade of St. John’s Church from Wiesław Konopka’s Collection `Old Vilnius´, Łomża, Poland ISBN- 978-9955-888-13-0 This publication is protected by international copyright law. All rights reserved. No part of this publication may be reproduced, stored, in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the author. Printed by: UAB „Biznio mašinu kompanija” J. Jasinskio g. 16A, Vilnius LT-01112 Tel. 8 5 254 69 61, faks. 8 5 254 69 62 September 2008 TABLE OF CONTENTS List of tables ........................................................................................ 13 List of schemes .................................................................................... 15 Preface ................................................................................................. 17 Introduction ....................................................................................... 25 Chapter I. PENSION CONCEPTS .................................................... 47 1.1 OTTO VON BISMARCK’S PENSION CONCEPT .................... 47 1.1.1 Biography ........................................................................... 47 1.1.2 Historic background .......................................................... 49 1.1.3 Main elements of pension concept ..................................... 50 1.1.4 Implementation and development ..................................... 51 1.2 SIR WILLIAM BEVERIDGE’S PENSION CONCEPT .............. 52 1.2.1 Biography ........................................................................... 52 1.2.2 Historic background .......................................................... 54 1.2.3 Main elements of the pension concept ............................... 56 1.2.4 Implementation and development ..................................... 56 1.3 MILTON FRIEDMAN AND JOSÉ PIÑERA’S PENSION CONCEPT ................................................................................... 56 1.3.1 Biographies ......................................................................... 56 1.3.2 Historic background .......................................................... 58 1.3.3 Main elements of the pension concept ............................... 59 1.3.4 Implementation and development ..................................... 61 1.4 THE WORLD BANK PENSION CONCEPT ............................. 63 1.4.1 The history of the organization .......................................... 63 1.4.2 Historic background .......................................................... 64 1.4.3 Main elements of the pension concept ............................... 65 1.4.4 Implementation and development ...................................... 66 1.5 THE PENSION CONCEPT OF THE EUROPEAN UNION ..... 66 1.5.1 The history of the organization .......................................... 66 1.5.2 Historic background .......................................................... 73 1.5.3 Main elements of the pension concepts ............................. 73 1.5.4 Implementation and development ..................................... 74 5 Table of contents Chapter II. PRESENTATION OF PENSION SYSTEMS .................. 77 2.1 AUSTRIA .................................................................................... 77 2.1.1 General information about the country ............................. 77 2.1.2 Historic development of the pension system in Austria .... 78 2.1.3 The present state of the pension system in Austria............. 84 2.1.4 Challenges and planned changes in the pension system in Austria ................................................................ 89 2.1.5 Summary ............................................................................ 90 2.2 BELGIUM ................................................................................... 91 2.2.1 General information about the country ............................. 91 2.2.2 The historic development of the pension system in Belgium .......................................................................... 92 2.2.3 The present state of the pension system in Belgium .......... 96 2.2.4 Challenges and planned changes in the pension system in Belgium ............................................................. 101 2.2.5 Summary .......................................................................... 102 2.3 BULGARIA ............................................................................... 102 2.3.1 General information about the country .......................... 102 2.3.2 Historic development of the pension system in Bulgaria . 103 2.3.3 The present state of the pension system in Bulgaria ........ 107 2.3.4 Challenges and planned changes in the pension system in Bulgaria ............................................................. 109 2.3.5 Summary .......................................................................... 111 2.4 CYPRUS .................................................................................... 111 2.4.1 General information about the country .......................... 111 2.4.2 Historic development of the pension system in Cyprus ... 112 2.4.3 The present state of the pension system in Cyprus – as of 31 December 2007 .......................................................... 115 2.4.4 Challenges and planned changes in the pension system in Cyprus .............................................................. 118 2.4.5 Summary .......................................................................... 120 6 Table of contents 2.5 THE CZECH REPUBLIC .......................................................... 121 2.5.1 General information about the country ........................... 121 2.5.2 Historic development of the pension system in the Czech Republic ............................................................................ 122 2.5.3 The present state of the pension system in the Czech Republic 125 2.5.4 Challenges and planned changes in the pension system in the Czech Republic ....................................................... 128 2.5.5 Summary .......................................................................... 130 2.6 DENMARK ................................................................................ 131 2.6.1 General information about the country ........................... 131 2.6.2 Historic development of the pension system in Denmark 132 2.6.3 The present state of the pension system in Denmark........ 136 2.6.4 Challenges and planned changes in the pension system in Denmark .......................................................... 143 2.6.5 Summary .......................................................................... 144 2.7 ESTONIA ................................................................................... 145 2.7.1 General information about the country ........................... 145 2.7.2 Historic development of the pension system in Estonia ... 146 2.7.3 The present state of the pension system in Estonia ...........148 2.7.4 Challenges and planned changes in the pension system in Estonia ............................................................. 152 2.7.5 Summary .......................................................................... 153 2.8 FINLAND .................................................................................. 154 2.8.1 General information about the country ........................... 154 2.8.2 Historic development of the pension system in Finland .. 155 2.8.3 The present state of the pension system in Finland .......... 159 2.8.4 Challenges and planned changes in the pension system in Finland ........................................................................ 164 2.8.5 Summary........................................................................... 165 2.9 FRANCE .................................................................................... 166 2.9.1 General information about the country ............................ 166 2.9.2 Historic development of the pension system in France ... 167 7 Table of contents 2.9.3 The present state of the pension system in France............ 172 2.9.4 Challenges and planned changes in the pension system in France ............................................................... 177 2.9.5