European pension systemBismarck or Beveridge?

Abstract

The aging process faced by the countries of the European Union is leading them to introduce reforms in their public pension systems. One way to interpret these reforms is to think about them as changes in the intergenerational pact to make the system sustainable over time. In addition to intergenerational redistribution, pay-as-you-go pension systems allow intragenerational redistribution. Taking into account this dimension, we can distinguish between contributory (or Bismarckian) pay-as-you-go systems and pure redistributive pension systems (or Beveridge). This article analyzes the origin of these systems and the differences between European pension systems according to this characteristic. In the final part, we reflect on the future model of pensions in the European Union.