The Future Of Pensions: Reforms And Their Consequences - Introduction

Origins of pension systems Relatively generous provision of incomes for old people is among the main achievements of modern westernised economies. Historically, the state entered and expanded the market for pension provision in order to eliminate old-age poverty and to overcome diverse types of market failures. However, since pension budgets have been increasingly challenged by demographic and financial developments, governments around the world have been reforming their pension systems. This special issue sheds light on the origin, design and potential consequences of pension reform – with a special focus on the UK and Germany. Before turning to the structure and reforms of specific pension systems, we first discuss reasons for why governments should engage in pension provision in the first place. As the basis of this analysis we utilise the standard framework that identifies five rationales for state intervention (Diamond, 1977): market failure, paternalism, redistribution, revenueraising and administrative efficiency.