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This comparative chapter by Ebbinghaus and Wiß analyses the governance of supplementary pensions in ten European countries and the scope for state intervention or collective regulation by employers and trade unions. Private occupational and personal pensions combine different features in terms of coverage, benefits, funding rules, supervision, and administration. While the state partially retreated from the public responsibility to finance sufficient and adequate pensions, the need for and importance of state regulation and societal control of private pensions increased. Societal actors like trade unions, employers' associations, and financial services became more important in governing pension systems. Since the pension beneficiaries rely as principals on agents with more financial knowledge, regulation should decrease asymmetric information and limit uneven power distribution. The more pensions are privatized and funded, the more a financial crisis can increase risks for old age income security.

Switzerland is considered a prototype of a multipillar pension system, including both public and private, pay-as-you-go-financed social insurance and mandatory funded occupational pensions. As many European countries introduced supplementary funded pensions over the last decades, Switzerland has become an instructive case for policymakers looking for lessons in pension fund governance, in particular concerning underfunding and guarantees in defined-contribution (DC) pensions during financial crisis. However, the Swiss case does not provide a simple blueprint of effective regulation: regulation of supplementary pensions not only involves employers and trade unions but it also entails constant political renegotiation. Moreover, the Swiss case also demonstrates the difficulties of effective regulation because governance practice tends to deviate from the formal rules both to the detriment and to the advantage of the sponsors, insured, and benefit recipients.

The Netherlands departed from the Bismarckian social insurance tradition by combining flat-rate public basic pensions with quasi-mandatory, funded occupational pensions with near universal coverage. The emergence, expansion, and reorganization of occupational pensions show their close integration with the public pension scheme. Many efforts helped expand and improve coverage through collective agreements by employers and trade unions. Short case studies of pension funds in the public and private sector highlight the core features of the Dutch system as well as its institutional variation. In the wake of the financial crisis, occupational pensions were scaled back since these defined-benefit (DB) pensions were threatened by underfunding. Current debates question the future viability of the Dutch system in an era marked by both demographic ageing and volatile financials.

The British pension system with a meagre basic pension in the Beveridge tradition and coexisting private pensions that have increasingly been transformed from defined-benefit (DB) to defined-contribution (DC) pensions has generally been viewed as consistent with the liberal welfare and production regime types. While this classification is appropriate for some elements, from the 1950s onwards a strong statist side was expressed through the role of the state as employer and as regulator, with important consequences for the scale of state provision and the coverage and governance of occupational provision. The dynamics set in place by these arrangements lie behind recent pension reforms. These serve to enhance the hybrid pension system, moving it in a clearly more social democratic direction. However, the financial crisis and the change of government in 2010 mean that this movement might now be halted even before it had really begun.

The introductory chapter discusses the need for studying the changing public–private pension mix and the governance and regulation of private (occupational and personal) pensions. Public pension systems with pay-as-you-go financing have not only come under pressure due to demographic and socio-economic changes but also the recent financial crisis has challenged funded private pensions. Mapping the main features of the public–private pension mix of the selected ten European countries, the chapter gives an overview of the content of the country chapters, drawing some lessons from their varied experiences. The introduction also sketches the main topics of the three comparative studies on the changing public–private pension mix, the varieties of pension governance and regulation as well as the poverty and inequality patterns emerging from the different pension systems.

Following the Bismarckian social insurance tradition, the post-war pension system of France has been characterized by occupational fragmentation, its strong reliance on pay-as-you-go financing, and by the direct involvement of employers and trade unions in their management. Generous benefits offered a combination of statutory public pension and mandatory occupational pensions, initially crowding out any funded private pensions. However, pension reforms that promoted retrenchment both in the two pay-as-you-go-financed statutory public and occupational pension schemes since the 1990s have resulted in the gradual development of funded private pensions. In recent years, the governance of mandatory occupational schemes has been harmonized and inequalities between different occupational categories have been reduced. While the regulatory framework governing voluntarily funded plans (both occupational and personal pensions) has been largely unified, access to these schemes remains mostly limited to high-skilled employees.

The chapter first reviews the emergence and change of the public–private pension mix in Germany, emphasizing the path-dependent but recent path-departing developments from the Bismarckian social insurance tradition. The politically contentious pension reforms of the 1990s and subsequent reforms in the 2000s followed a strategy of institutional layering by introducing a voluntary personal (‘Riester’) pension, while fostering coexisting occupational pensions. At the same time, the reforms of public pensions made voluntary private pensions necessary for status maintenance in old age. The second part analyses the structure and governance of occupational and personal pensions in Germany, highlighting the new instruments for the design of occupational pensions such as collective agreements and collective pension institutions self-administered by employers and trade unions. The chapter concludes with an outlook on the future, discussing potential scenarios for institutional change and its consequences for old age income in Germany.

Denmark developed a multipillar pension system, adding private pensions to its universal flat-rate, tax-financed ‘people's pension’. Following the failure to introduce a public earnings-related supplementary pension, fully funded ‘labour market’ pensions were added through collective agreements between employers and trade unions, extending these occupational pensions to nearly all employment groups since the early 1990s. Comprehensive institutional change took place almost without any legislation by non-state actors, except for the reform of the public basic pension which became increasingly means-tested. Private pension governance is typically left to pension funds or to special life insurance companies jointly owned and controlled by unions and employers. Strict rules protect pension funds against financial shocks, but these were eased during the financial crisis to improve returns on these defined-contribution (DC) pensions. Nevertheless, the Danish pension system looks quite satisfactory from both an economic and social policy perspective.

Belgium's public–private pension mix can be considered a paradox: despite the conservative-corporatist welfare regime and rather limited Bismarckian social insurance for old age, voluntarist occupational pensions remained underdeveloped. Until recent pension reforms, the comparatively low replacement rates of public pensions did not lead to the development of extensive occupational plans, even if several institutional conditions that elsewhere advanced the expansion of supplementary pensions were given. The chapter also reviews the governance of private pensions, discussing how recent attempts to broaden access to occupational pensions have been facilitated and frustrated by the decision to embed those schemes into the neo-corporatist system of collective agreements. Although this allows to extend coverage of private pensions for lower income groups, at the same time it also severely limited the possibility to mobilize funds that are necessary to guarantee adequate income maintenance for the general population.

The Swedish pension system developed through different stages from the establishment of the first statutory basic pension, the introduction of an earnings-related supplementary pension, and collectively negotiated occupational pensions to the most recent institutional change. A comprehensive pension reform was finally decided in 1994 which led to a switch to an earnings-related insurance with notional defined-contribution (NDC) and a mandatory funded personal pension component (premium pension). In the second pillar, occupational pensions negotiated by employers and trade unions came under financial pressures due to the decline of industrial employment, which led to some restructuring such as the gradual switch from defined-benefit (DB) to defined-contribution (DC) pensions. The chapter also examines the governance and design of these occupational schemes as well as personal pensions.

Finland's pension system consists of income-tested ‘national pensions’ and statutory employment-related pensions. The latter are ‘hybrid’ public–private pensions that were legislated in the 1960s and partly funded through private insurance companies, while employers and trade unions participate in their administration. There is a strong corporatist element: the social partners have been owners of the statutory schemes, therefore they channelled improvements through ‘their’ own schemes, not via voluntary private pensions as elsewhere. Since the mandatory employment-related pensions are income-related with no ceilings, the high-income earners have had no incentives to contract voluntary supplementary pensions. However, this is changing through piecemeal institutional change: as statutory pension promises are cut back, an expansion of voluntary occupational and individual pensions occurs.