The European social dimension in pension policy

Abstract

This article analyses how the social objective of protecting lower earners from old-age poverty is supported at the EU level. It argues that although the Member States are responsible for pension policy, the EU framework could empower domestic social policy actors by providing them with cognitive and normative resources. The analysis is based on the situation in three countries: Germany, Poland and the United Kingdom. The article shows that there are well developed shared data and indicators, but that there is limited scope for common interpretation of the data. There is also a lack of common policy solutions due to two diverging pension reform paradigms: the adequacy paradigm and the sustainability paradigm. Although the latter increasingly has incorporated an adequacy perspective that limits pure cost containment policies, Europe 2020 limits the scope for positive social policy measures linked to the adequacy approach because it prioritizes a low tax wedge and growth-enhancing initiatives.