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Britain's Pensions CrisisHistory and Policy$
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Hugh Pemberton, Pat Thane, and Noel Whiteside

Print publication date: 2006

Print ISBN-13: 9780197263853

Published to British Academy Scholarship Online: January 2012

DOI: 10.5871/bacad/9780197263853.001.0001

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Reforming Pensions in Germany and Sweden: New Pathways to a Better Future?

Reforming Pensions in Germany and Sweden: New Pathways to a Better Future?

(p.241) 16. Reforming Pensions in Germany and Sweden: New Pathways to a Better Future?
Britain's Pensions Crisis

Karl Hinrichs

British Academy

The development of pension systems in Germany and Sweden shows several similarities. In both countries the decisive leap towards earnings-related public pensions took place at the end of the 1950s. The expanded public pension scheme became the cornerstone of the German Sozialstaat and the ‘jewel in the crown’ of the social democratic welfare state in Sweden. Again, during the 1990s, Sweden and Germany turned away from established paradigms and introduced pension reforms that changed institutions in a path-breaking fashion. This chapter focuses on innovative policy changes and the politics of pension reforms in Sweden and Germany. It examines selected features of the reform process and compares some potential outcomes, focusing on the issue of sustainability. It discusses whether both Swedish and German pension systems continue to protect older people from poverty, deliver appropriate earnings replacement when terminating employment, and assure that pensioners will not fall behind prevailing standards of living throughout their retirement.

Keywords:   Germany, Sweden, pensions, pension reforms, earnings, poverty, politics, sustainability, employment, retirement

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