Occupational pensions in Europe: Trojan horse of financialization?

Abstract

The aim of this article is to shed light on the nexus between occupational pensions (OPs) and the financialization of pensions in Europe. In particular, we address the following questions: Has the recent evolution of OPs contributed to the financialization of pension policy? Is the nexus between OPs and financialization the result of the increased influence of financial markets in the pension field? Or of a more complex interaction of state, market, and social actors? By comparing Italy, the Netherlands and the United Kingdom, we show financialization is a broad process that affects the three countries, but it has followed three different paths. In Italy, financialization is spreading through individual pension schemes rather than OPs. The Dutch collective OPs are still a central part of the pension systems, but are increasingly influenced by the financial markets. In the United Kingdom, employer‐led OPs are in the hands of the financial services industry. This proves that financialization is a powerful trend, but has to deal with domestic socioeconomic institutions (a country's political economies and pensions institutions) that shape actors' strategies and reforms. Financial actors have an increased role in pension politics, but are involved in complex interactions with the state, employers, and trade unions.

Financialization and the rise of atypical work

“…Hence, this portfolio shift has made employees and pensioners future or current 'everyday' investors since most of their retirement income increasingly depends on financial market fluctuations (Ebbinghaus 2021;Langley 2008). Scholars have identified such patterns in a wide array of advanced and developing countries (Anderson 2019;Belfrage 2008;Bonizzi et al 2021;Langley 2004;Macheda 2012;McCarthy et al 2016;Natali 2018;Rodrigues et al 2018;Saritas 2020;Waine 2001), but their focus is primarily centred on how the pension funds became financialized and the related political consequences, rather than on potential linkages with labour market dynamics.…”

Multipillarisation remodelled: the role of interest organizations in British and German pension reforms

“…Political economy approaches expect organized capital, both employer associations and the finance sector, to have a material stake in reducing state responsibility and public expenditure as first order preference (Mares 2003). While employers might prefer their own occupational pensions to attract and retain skilled workers, the finance sector is keen to provide investment management services to occupational pensions or sell individualized saving plans (Naczyk 2013;Natali 2018). Occupational schemes provide an opportunity for outsourcing financial management to banks or investment agencies, while insurances are keen to sell individual or group contracts.…”

EU Pension policy and financialisation: purpose without power?

“…More research is needed on how finance actually exerts influence, in comparison with other collective actors (Natali 2018). Even the most painstaking research on the US (Krippner 2011: ch.3;Langley 2008: ch.4) is about the unintended consequence of policy changes that empowered finance, not about how finance used its power in bringing about financialising policy changes.…”