Solidarity against All Odds: Trade Unions and the Privatization of Pensions in the Age of Dualization

Politics & Society 1 –24

© 2015 SAGE PublicationsReprints and permissions:

sagepub.com/journalsPermissions.nav DOI: 10.1177/0032329215584789

pas.sagepub.com

Article

Solidarity against All Odds: Trade Unions and the Privatization of Pensions in the Age of Dualization

Marek NaczykCentre d’études européennes / LIEPP, Sciences Po ParisOxford Institute of Social Policy, University of Oxford, UK

Martin Seeleib-KaiserOxford Institute of Social Policy, University of Oxford, UK

AbstractIn an era of fiscal austerity and dualization of social protection, has organized labor become increasingly split along skill and industry lines? Against recent political science accounts of trade union involvement in social policymaking, this paper argues that, in the specific area of pensions, unions representing high-skilled workers and the core industrial sectors of the economy have paradoxically been led to increase their cooperation with unions representing the less privileged segments of labor, in order to improve coverage of private pensions across the board. These unions’ motivations for doing so and the strategies they have employed have nonetheless differed according to the preexisting institutional design of domestic pension systems. The argument is supported with case studies of British, French, German, and Belgian unions’ involvement in contemporary pension reform.

Keywordstrade unions, pension privatization, private pension funds, dualization, solidarity

Corresponding Author:Marek Naczyk, Centre d’études européennes de Sciences Po, 27, rue Saint-Guillaume, 75337 Paris Cedex 07, France. Email: [email protected]

584789 PASXXX10.1177/0032329215584789Politics & SocietyNaczyk and Seeleib-Kaiserresearch-article2015

by guest on June 25, 2015pas.sagepub.comDownloaded from

mailto:[email protected]

http://pas.sagepub.com/

2 Politics & Society

Introduction

In an era of permanent austerity and privatization of social protection, are trade unions characterized by greater occupational egoism? And has organized labor become increas-ingly divided? Students of pension reform have recently argued that, because of their members’ higher bargaining and earning power, trade unions representing primarily high-skilled employees have often favored private pension provision over more redis-tributive public plans and have consequently been in conflict with unions that include less skilled and low-wage workers.1 Their analysis echoes that of Palier and Thelen on increased segmentation—or “dualization”—in the French and German political econo-mies.2 These two authors have suggested that, although they historically set relatively progressive social standards for the rest of the economy, workers and employers in the “core”—generally more skill-intensive—manufacturing industries have increasingly “turned inward” and shaped labor market and social policy institutions primarily “for themselves,” thereby creating a rift with other industries and segments of labor.

There is no doubt that the contemporary trend toward retrenchment and privatiza-tion of pensions may generate social protection dualism.3 In this article, however, we challenge recent accounts of labor behavior in the field of pensions and argue that, in the face of growing political pressures for pension privatization, trade unions repre-senting high-skilled and less-skilled workers have paradoxically been led to increase their cooperation with one another in this specific policy area, so as to extend coverage of supplementary pensions to as large a group of workers as possible.

The unions’ reasons and the strategies they have employed have differed according to the preexisting institutional design of domestic pension systems. In countries that had only basic public pensions and relatively large coverage of employer-provided occupational pensions after the Second World War, these traditional supplementary plans have come under mounting financial pressures, but have also been challenged by politicians and the financial industry because of their institutional fit with a fading era of stable industrial employment. To preserve their existence, trade unions representing high-skilled segments of labor have allied with the rest of the labor union movement to push for the expansion of supplementary pensions to the whole of the workforce, thereby reducing existing dualisms in coverage.

Political dynamics and unions’ strategies were different in countries that had more generous public pensions and much more marginal coverage of occupational pensions during the postwar period. In these countries, trade unions representing high-skilled workers, particularly those in the manufacturing industries, have continued defending generous public pensions. However, faced with governments’ increasing commitment to pension retrenchment and privatization, they have tried to counter the expansion of individual retirement savings plans managed by commercial financial services compa-nies and sought to expand encompassing and not-for-profit occupational pension plans through industry-level——rather than firm-level——collective agreements with employers. Unions representing workers in the metalworking industries have been at the forefront of this strategy; they have seen it as a means of preserving their role as pacesetters for other sectors of the economy and other segments of labor.



Naczyk and Seeleib-Kaiser 3

We support our argument with case studies of British, French, German, and Belgian trade unions’ involvement in the contemporary politics of pension privatization. Unlike, for example, the Nordic countries, the four selected countries all represent likely cases of social protection dualization. Indeed, Britain embodies the liberal world of welfare where, because of the importance of private social protection, segmentation has been historically quite prevalent. By contrast, France, Germany, and Belgium all belong to the group of conservative welfare regimes in which dualistic pressures are considered to be on the rise.4 The four cases also have the advantage of presenting useful variation on the organizational factors that might affect trade unions’ tendency to take either a “narrow” or a more “encompassing” view of workers’ interests.5 Thus, whereas Britain and Germany have been moderately unionized, France’s union den-sity has been among the lowest in Western Europe. By contrast, Belgium has had the highest rate of unionization after the Nordic countries.6 Furthermore, unions’ organi-zational traditions have differed among the four countries, with the importance of crafts and occupational unionism in Britain, the dominance of industrial unionism in Germany, and significant fragmentation of organized labor along ideological and reli-gious lines in France and Belgium.7

Instead of an “inward turn” of organized labor, we find that, in the specific field of private pensions, unions representing different segments of labor have been led to build encompassing wage-earner alliances, which have in turn been able to enter into coalitions with parts of the business community. In Britain and France, where private-sector workers historically had access to limited statutory social insurance but were covered by a large, though in many ways still voluntary, occupational pension sector, skilled and less skilled workers’ unions have fought together in the 1990s and the 2000s to make these supplementary pensions compulsory for all workers. In Germany and Belgium, where public social insurance was generous and only a minority of the workforce benefited from private schemes, unions in the metalworking industry have pressed since the late 1990s for the creation of collectively negotiated pension plans and for their expansion across other industries.

The next section develops our argument in more detail. Section 2 presents our four historical case studies. The final section concludes and examines the implications of our findings for research on the politics of dualization.

Trade Union Egoism or Solidarism?

Over the past two decades, comparative political economists have called into question dominant class-based accounts of welfare state development. The power resources theory traditionally argued that social citizenship rights were institutionalized as a result of the working class mobilizing through trade unions and social-democratic par-ties, against strong resistance of employers.8 Yet students of industrial relations cast doubt on these assumptions by highlighting the heterogeneity of workers’ interests over wage distribution9 and by showing that centralized—and more redistributive—forms of wage bargaining had typically been established with the support of alliances between specific segments of labor and business.10 The literature on the varieties of




capitalism later contributed to extend the analysis of such cross-class alliances and intra-labor cleavages to the realm of social policy.11

Recent studies have suggested that the divides between segments of the workforce have become increasingly consequential since the oil shocks of the 1970s. For exam-ple, students of party politics have argued that mass unemployment and the rise of atypical (e.g., fixed-term and part-time) work contracts have created a conflict between “insiders” and “outsiders” over social policy and have therefore presented political, particularly left-wing, parties with strong electoral dilemmas.12 But structural changes in the economy, including the feminization of the workforce and the shift of employ-ment toward services, have also added to the heterogeneity of trade unions’ constituen-cies and are thought to have made their strategic options more difficult.13 Intra-union divisions are potentially most apparent in the area of social policymaking that gener-ates the highest levels of expenditure, namely, old-age pensions. Indeed, in addition to dividing workers according to their age group14 or their gender,15 pensions may also split them by occupational or skill profile.

The skill divide is considered particularly salient when it comes to the choice between public and private retirement provision. In a historical study of the develop-ment of the British and Dutch postwar pension systems, Oude Nijhuis has argued that organized labor’s support for the redistribution of workers’ income in old age through public benefits has crucially depended on the interaction between unions’ skill profile and their organizational structure, particularly whether they represent large sections of the workforce or prefer to cater to the interests of narrower constituencies.16 He found that in the Netherlands a strong tradition of industrial unionism, which consists in organizing both skilled and less skilled workers in encompassing industry-level unions, led Dutch labor to favor the creation of redistributive social security in the 1950s. By contrast, the prevalence of—more narrowly skill-based—crafts and occu-pational unionism among British skilled manual and white-collar workers led these groups to oppose, throughout the 1950s and 1960s, any redistribution of risks and income via the public pension system. By that time, these groups were already covered by generous supplementary employer-provided pension schemes. Given the narrow-ness of their membership and their constituencies’ vested interest in preserving these advantages, crafts and white-collar unions did not try to accommodate the pro-redis-tribution preferences of less skilled workers, who were generally not covered by occu-pational plans.

In her study of the contemporary politics of pension reform in Continental Europe, Häusermann has also emphasized the existence of a skill-based intra-labor cleavage over private pensions, but she argues that the transition to a postindustrial economy has led to growing conflict between workers.17 She has found that, although trade union movements have generally remained unified in their defense of existing public pensions, they have become increasingly split over governments’ attempts to expand private plans. According to Häusermann, whereas low-skilled manual and service workers’ unions have opposed funded pensions on the grounds that they threaten pub-lic provision, unions representing high-skilled blue-collar or white-collar workers—such as the German chemical workers’ union (IG Chemie) and the French professional




and managerial employees’ union (CGC)—have been much more accommodating, because their members could expect to be offered supplementary benefits by their employers.

In a similar vein, though their study does not focus on pensions, Palier and Thelen have argued that over the past few decades high-skilled workers in the core manufac-turing industries have increasingly tended to reach deals with their own firms’ manag-ers and have therefore left other industries and other, often less-skilled, workers behind.18 They contend particularly that, whereas it used to bargain with employers over social standards that bridged the gap between skilled and less skilled workers and were diffused through pattern bargaining to all sectors of the economy, organized labor in the German metalworking industries (e.g., the IG Metall union) and in French “national champion” firms (e.g., automaker Renault) has lost its capacity to play this pace-setting role. By accepting to delegate more and more issues to firm-based bar-gaining, it has encouraged workers’ “local egoism,” which has in turn led to the insti-tutionalization of new forms of labor market and social protection dualisms. Taken together, these studies suggest—or at least convey the impression—that instead of trying to prevent dualization, organized labor may on the contrary have exacerbated it.

We do not deny the existence of significant cleavages within the workforce and the trade union movement, but we take issue with the recent literature’s assumption that organized labor has systematically become more divided and more egoistic. There may be exceptions to this purported pattern. Against what is becoming a conventional understanding, we argue that, in a position of greater political weakness, trade unions representing distinct segments of labor may also be led to close ranks and foster soli-darity among each other. This type of coalitional dynamics has arguably occurred specifically in the field of old-age pensions.

With the liberal turn at the beginning of the 1980s and growing emphasis on fiscal pressures facing the welfare state, public pensions have been a prime target in govern-ments’ retrenchment initiatives.19 At the same time, a political consensus has emerged over the need to shift pension provision to the private sector, driven by the promotion of new policy paradigms by international organizations20 and, more important in the affluent democracies, by considerable lobbying on the part of financial services com-panies, which stand to profit from the development of a market in supplementary pen-sions.21 In this context, organized labor’s initial, and unanimous, response has been to defend the existing public pension system.22 However, as they have been unable to stem the tide of pension retrenchment and privatization, trade unions representing dif-ferent segments of labor have been led to unify strategically in an attempt to mitigate the distributional impact of these developments and to extend coverage of supplemen-tary pensions to larger sections of the workforce, through either collective bargaining or legislative changes.

Because of the variety of preexisting postwar pension arrangements and the feed-back effects they have exerted,23 the pathways that have led unions to increase their cooperation have differed cross-nationally. We distinguish between two groups of countries: those that, after the Second World War, had only modest public pensions, but complemented by a relatively large coverage of employer-provided occupational




benefits, and those that had more generous public pensions, with only a residual role of occupational plans.

As has been the case elsewhere, public pensions in the first group of countries have been subject to cuts by governments. However, preexisting occupational schemes, which already played a very significant role in pension provision, have been chal-lenged just as much. This has had to do, first, with the financial pressures they have faced. Postwar occupational plans were often of the more generous “defined-benefit” type24 and, thanks to looser government regulations, they did not necessarily accumu-late enough assets to meet mounting liabilities. With demographic aging, it has thus become increasingly costly for employers to provide them.

Second, they have been criticized for their lack of institutional fit with more service-oriented and flexible labor markets. Indeed, as they were used by largely industrial employers either to retain skilled workers or to pacify labor relations, occu-pational plans often favored long-standing employees over “early leavers.” To become eligible, workers frequently had to complete a minimum number of years of service. Moreover, their accrued rights were not necessarily portable across firms. Such rules could thus hamper job mobility. Last but not least, traditional occupational schemes have become a target for the financial services industry. This is because they were very often directly administered by employers and trade unions on a not-for-profit basis. Commercial financial firms have thus perceived them as a competitor in the market for private retirement savings and have targeted them in order to seize a greater share of the business.25

As financial and political pressures on occupational pensions accumulate in coun-tries where they already played a significant role in workers’ retirement income pack-age, their preservation has been of strategic importance for organized labor. Since coverage of such schemes was not fully compulsory and was most prevalent among white-collar and high-skilled manufacturing workers, trade unions representing these segments of labor have tried to defend occupational pensions’ existence and legiti-macy by pushing for their extension to the whole of the workforce. In doing so, they have found natural allies in unions representing less skilled—and traditionally less well covered—workers. But they have also forged cross-class coalitions with employ-ers’ associations in the manufacturing industries, because these parts of the business community still have an interest in preserving schemes they had helped set up.

In countries with more generous social insurance, pressures for reform have con-centrated on public schemes. And, despite their opposition to it, unions have been unable to stop the trend toward retrenchment.26 As policymakers have sought to com-pensate for the declining generosity of public pensions with the development of pri-vate provision, unions have defended a specific type of supplementary schemes. Instead of accepting the expansion of individual retirement savings accounts man-aged by for-profit providers or of firm-level occupational plans, organized labor has advocated the institutionalization of more encompassing and not-for-profit industry-wide pension funds. By favoring such “collectively negotiated schemes,” unions have effectively sought to make supplementary pensions accessible to as many




workers as possible and to support the creation of a form of “social security through industrial agreements.”27

We argue, in particular, that unions in the core manufacturing—more precisely met-alworking—industries have played a crucial role in putting this strategy on the agenda. As stressed by Palier and Thelen,28 these unions were traditionally leaders in Continental and Nordic collective bargaining and helped organized labor press for progressive social standards.29 Their strong position stemmed not only from the centrality of manu-facturing in the economy, but also from the fact that as industrial unions they repre-sented both skilled and less skilled workers and therefore strove to unite different segments of labor.30 At a time when industrial relations have been increasingly in cri-sis,31 occupational pensions constitute a new item on the negotiation agenda, in addition to wages or working conditions.32 Metalworkers’ unions—and their counterparts in organized business—have therefore seen occupational pensions as a way of revitalizing industry-level collective bargaining and of bolstering their pacesetting role.

In sum, whereas much recent literature emphasizes a growing dissension and egoism in the trade union movement over labor market and social policy issues, we argue that, in the conflict-ridden area of pension policymaking, different segments of organized labor have been led to reaffirm their commitment to solidaristic values. Where occupational pensions were already widespread, trade unions have fought to extend coverage to all workers. Where supplementary pensions have been on the rise, trade unions have tried to expand their reach to as many workers as possible through industry-level collective agreements. The next section illustrates our claims with a comparative historical analysis of recent British, French, German, and Belgian politics of pension privatization. We start with a general description of these pension systems’ postwar institutional design, which is necessary to understand their subse-quent evolution.

Combating Dualisms in Private Pension Provision in Liberal and Continental Welfare Systems

Although Britain and France are generally considered to have belonged to two differ-ent worlds of welfare33—Beveridgean and Bismarckian, respectively—their postwar pension systems shared a remarkable similarity in that private-sector workers had access only to basic public pensions that were supplemented by private occupational schemes. This institutional design stood in sharp contrast to that of the German and Belgian systems, where statutory social insurance was much more comprehensive. In Britain, workers were covered by a contributory “basic state pension,” introduced through the National Insurance Act 1946. However, this flat-rate benefit was kept deliberately low and in fact barely reached subsistence level. In France, in contrast to public-sector employees, who were given access to generous final-salary statutory schemes, private-sector employees were entitled from 1945 to a mere 50 percent of past earnings, calculated only to a social security ceiling that roughly equaled the aver-age gross wage.




In both countries, it was generally expected that workers would maintain their level of income in retirement through additional private provision. Occupational pensions expanded considerably in Britain in the decades following the Second World War; about half the workforce was covered by the mid-1960s.34 Nevertheless, the voluntary and very decentralized—primarily company-based—character of such schemes meant that the British population was split into “two nations in old age.”35 Whereas half of workers, overwhelmingly skilled ones, could benefit from a generous defined-benefit employer-provided plan, the other half, usually less skilled, were bound to face pov-erty in old age. Following almost two decades of political controversy,36 including within organized labor,37 a cross-party consensus was reached in 1975 over the cre-ation of a “state earnings-related pension scheme” (SERPS) to complement the basic state pension for workers not covered by a more generous company scheme.

In France, occupational pension provision also played an essential role but devel-oped through more centralized collective agreements than in Britain. As early as 1947, organized business and the CGC, a union representing white-collar managerial and professional staff (called “cadres”), signed a collective agreement that established a nationwide supplementary scheme—the AGIRC—for this category of employees. Companies in the metalworking and mining industries played a central role in the creation of this institution.38 The AGIRC indeed continued and expanded schemes that these companies had set up for their engineers in the 1930s. But because those plans’ financial assets were wiped out during the Second World War, the AGIRC was financed on a “pay-as-you-go” basis, that is, through direct transfers between current workers and current pensioners. By contrast, blue-collar workers began to be covered by simi-lar pay-as-you-go occupational schemes, after 1955 negotiations at carmaker Renault set the pace for further collective agreements, including the first industry-level one in 1957 in the metalworking industry. In 1961, organized business and labor founded a federation—called the ARRCO—to coordinate these various blue-collar schemes. In 1972, the state made coverage of AGIRC and ARRCO mandatory, but both schemes continued to be fully managed by the social partners and to incorporate a significant element of voluntarism; companies were allowed to choose between a minimum and a maximum contribution rate and, indirectly, benefit level, giving rise to significant social protection dualisms.

Compared with Britain and France, the German and Belgian postwar pension sys-tems relied on much more generous statutory social insurance. Following a 1957 pen-sion reform, German private-sector employees with an average wage and a full contributory record could count on a replacement pension of about 70 percent of their last salaries.39 By contrast, after a 1967 reform, Belgian wage-earners were offered 60 percent of their average past earnings if they were single or lived in dual-earner house-holds and 75 percent if they headed single-earner households.40 Yet firm-level occupa-tional schemes continued to exist, as in both countries contributions and pensionable earnings were calculated only up to a ceiling. Coverage reached as many as two-thirds of employees in Germany in the mid-1970s, but fell to half by 1990 and one-third by the early 2000s, after the public system had matured.41 In Belgium, no more than about a quarter of private-sector personnel had access to employer-provided plans by the




beginning of the 1980s.42 In both countries, white-collar employees working in large (manufacturing, financial, or utility) companies were most likely to be covered by such plans.

Over the few past decades, all four systems have been considerably reconfigured and have seen the role of private pension provision increase.43 The rest of this section presents a stylized account of trade union involvement in these changes. Each subsec-tion starts by outlining how pensions in a country have been increasingly subjected to political campaigns for partial privatization, then describes organized labor’s initial opposition to those pressures. Finally, it shows how, in the face of creeping pension privatization, unions have decided to unite to extend coverage of supplementary pen-sions and reduce the magnitude of social protection dualisms.

Britain

In the early 1980s, Conservative politicians decided to shake the foundations of Britain’s postwar pension system. The first Thatcher government launched a first and relatively invisible wave of retrenchment by shifting the indexation of the “basic state pension” from wage inflation to generally lower price inflation.44 However, in 1983, the Centre for Policy Studies, a free-market think tank, put forward major changes in the area of supplementary pensions. It considered that existing employer-provided defined-benefit schemes inflicted a “grave injustice . . . on those who change jobs”45 and it suggested workers be allowed to opt out of such plans and to make their own provision through defined-contribution46 “personal and portable” pensions. The sec-ond Thatcher government set up a committee to investigate this possibility. Among its five members were two private insurers, one of whom—the chairman of Hambro Life, a company that sold primarily defined-contribution plans—described himself as “commercial and not ashamed of it.”47 In 1985, the Conservative government sug-gested it might even abolish the “state earnings-related pension scheme” (SERPS) and fully replace it with compulsory private pensions.48 Nevertheless, after facing strong political opposition, it decided in 1986 first to cut the generosity of SERPS and, sec-ond, to offer workers strong incentives to opt out of SERPS or of their occupational scheme and to save in a personal plan provided by a financial institution.

Organized labor fiercely resisted the Conservatives’ proposals. It was skeptical from the outset about personal pensions and argued that financial institutions’ hard-sell tactics might lead individuals to make the wrong decisions.49 The Trades Union Congress (TUC) campaigned actively against the abolition of SERPS and against changes to occupational pensions. It did so together with the Labour Party, but also with the UK’s two largest employers’ associations, the Confederation of British Industry (CBI) and the Engineering Employers’ Federation.50 Yet it was unable to stop the trend toward pension privatization. In the 1990s, the Labour Party went back on its promise to restore the generosity of SERPS and decided to promote the expansion of private defined-contribution pensions. The main initiator of this change of strategy was Labour MP Frank Field, who campaigned for his party to “start thinking the unthinkable”51 and make it compulsory for employees to save in private schemes.52




Since support for public supplementary provision was still strong among the party’s rank-and-file and organized labor, Tony Blair’s first government decided to target SERPS (renamed “state second pension”) at low-income earners and to create volun-tary individual “stakeholder pensions” for middle-income earners without existing private provision.53

At the beginning of the 2000s, however, Britain’s looming “pensions crisis”54 prompted organized labor to change its stance and to unanimously propose the expan-sion of private supplementary schemes to the whole workforce. A spate of high-profile closures of generous defined-benefit plans highlighted the steady decline in coverage of traditional occupational schemes.55 After accounting standards were modified and regulatory changes forced employers to improve the portability of workers’ pension rights, occupational provision became increasingly expensive for employers and lost much of its effectiveness as a skill-retention tool. Unable to block the closure of com-pany schemes through the industrial relations system, trades unions started to press for legislative changes.

Amicus, a union of high-skilled workers who were among the most strongly affected by the closures, played a key role. In early 2002, the union—formed by a merger of crafts/occupational unions AEEU (Amalgamated Engineering and Electrical Union) and MSF (Manufacturing, Science, and Finance)—started denouncing a “great pension robbery”56 and encouraged the TUC to embark on a great crusade to introduce compulsory employer contributions for private schemes.57 At the time, Amicus allied with general unions GMB and TGWU, which also repre-sented less skilled segments of labor, as well as with public-sector union Unison to try to force compulsion onto Labour’s official policy agenda.58 The TUC warned that, if the party did not commit to address this issue in its 2005 manifesto, it would “pay a heavy electoral price.”59

Organized labor could count on the support of lobbies such as the National Association of Pension Funds and the Association of British Insurers;60 the greatest stumbling block was employers. Since Britain’s largest employers’ association, the CBI, considered that compulsion was “all about punishment,”61 the Blair government fretted about being attacked by the Conservatives for trying to introduce another “stealth tax.” The deadlock was broken after the 2005 general election, when the Engineering Employers’ Federation (EEF)—whose members were Amicus’s main partner in collective bargaining and had still relatively high coverage of occupational plans—broke ranks by announcing that voluntarism no longer worked and that a level-playing field was necessary. The TUC welcomed the announcement and said that “no longer can other employer organisations pretend that business is united.”62

The EEF’s move allowed Labour and the Conservatives to work out a cross-party agreement63 over a form of “soft compulsion” through the “automatic enrolment” of employees into workplace pensions. Moreover, to ensure adequate overall benefits and prevent the emergence of new dualisms in the quality of supplementary provision between large companies and small and medium-sized enterprises (SMEs), the Pensions Acts 2007 and 2008 significantly increased the generosity of the “basic state pension” and created a low-cost semipublic supplementary pension provider




specifically aimed for SMEs, which was eventually named the “National Employment Savings Trust.”64 It is also noteworthy that the collaboration between high-skilled workers’ union Amicus and general union TGWU resulted in their merger into Unite—Britain’s largest private-sector union—in 2007.

France

Political pressures for the introduction of private retirement savings became apparent in France in the late 1970s; and, as in Britain, they focused to a large extent on preex-isting occupational pensions. The insurance industry was instrumental in bringing pension privatization on the public agenda. For instance, France’s largest state-owned insurance company—the UAP (Union des Assurances de Paris)—launched an aggres-sive advertising campaign that targeted the AGIRC and ARRCO occupational schemes and used the following slogan: “Babies born in 1949, don’t count too much on babies born in 1979 to pay for your pensions.” Simultaneously, the Geneva Association, a think tank set up by the global insurance industry,65 financed a study that called for the expansion of fully funded—as opposed to only pay-as-you-go—pensions and received considerable public attention after it was published as a book.66 In 1987, at the time “personal pensions” were being introduced in Britain, the right-wing Chirac govern-ment created voluntary individual retirement savings accounts (PER, plans d’épargne pour la retraite) that offered tax deductions for investments made in bank accounts, life insurance contracts, equities, and bonds.

Trade unions, which were involved in the management of the AGIRC and the ARRCO, viewed these developments with great suspicion. The two occupational schemes were indeed facing serious problems at that time, largely because of their unusual institutional characteristics. Whereas most occupational schemes around the world cover their liabilities with at least a partial accumulation of financial assets,67 the French schemes worked on a fully pay-as-you-go basis. Moreover, despite the compulsory character of their coverage, the schemes allowed companies to set their contribution rates—and consequently the level of pension entitlements they would offer68—on a voluntary basis, between a minimum and a maximum. Since large manu-facturing firms, such as Renault, traditionally paid the maximum rates, corporate downsizing and deindustrialization in the 1980s contributed to a rapid deterioration in the proportion between contributors and pensioners in many of the more generous companies. As they were well aware of these imbalances, insurance companies were keen on emphasizing them.69 With time, any suggestion by insurers that—statutory and occupational—pay-as-you-go pensions should be cut increasingly infuriated orga-nized labor.70 In fact, trade unions played a key role in persuading a socialist govern-ment to repeal the PER retirement savings accounts.71

As preexisting occupational pensions were subject to strong financial and political pressures, organized labor started pressing employers at the end of the 1980s to expand the AGIRC and ARRCO schemes’ contributory base by compelling all companies to pay the maximum contribution rates. The immediate aim was to shore up the schemes’ finances, but unions’ demands could also suppress existing dualisms in the system by




improving the situation of workers covered by less generous schemes—often in SMEs or in sectors such as retail, hospitality, and textiles. Organized labor managed to imple-ment its strategy in three stages. A first impetus was given in 1987 when a few occu-pational schemes for salaried senior executives, which were still voluntary, were made fully mandatory and were integrated into white-collar employees’ AGIRC. Second, in the winter of 1992–93, unions negotiated a collective agreement with employers that introduced a gradual harmonization of contribution rates—and, hence, benefits—within blue-collar workers’ ARRCO. Finally, in 1994, a similar agreement was reached within the AGIRC.

Although organized labor was united behind this strategy, the unions that had con-tributed to create the pay-as-you-go occupational schemes were crucial in making it successful. Force ouvrière (FO), the union that had negotiated the collective agree-ments signed at Renault and in the metalworking industry in the 1950s, and that tradi-tionally presided over the ARRCO, argued that “in the name of equality and solidarity, one cannot refuse the right of textile workers to benefit from higher pensions.”72 By contrast, even though—as suggested by Häusermann73—its white-collar members could have benefited from the private plans promoted by the insurance industry, the CGC—which historically chaired the AGIRC—insisted that organized business could “not put the cadres’ scheme in jeopardy by bowing to the mercenary interests of one of its industry associations [i.e., the insurance lobby].”74

Both unions used their strong position in the governance of the schemes to persuade allied segments of business to support their plans. Although France’s peak employers’ association (the CNPF) prioritized a reduction in the schemes’ generosity to tackle their deficits, the Union of Metallurgical and Mining Industries (UIMM) was more willing to bow to trade unions’ demands. This organization not only helped found the ARRCO and the AGIRC, but also represented the companies that already paid the highest rates and hence could benefit from an across-the-board increase in pension contributions. Despite the vehement opposition of commercial insurers and many SMEs,75 the UIMM, which happened to be the most powerful federation within the CNPF, induced organized business to accept a gradual harmonization of—and for many companies an increase in—contribution rates within the pay-as-you-go occupa-tional schemes. In concession, unions accepted some cuts in the generosity of pen-sions. This policy of give-and-take between unions and employers was continued throughout the 1990s and eventually resulted in the integration of the ARRCO and the AGIRC into the European Union’s system of social security coordination, thus making them quasi-public schemes.76

In sum, both in France and in Britain, where statutory pensions were traditionally relatively low, increased political pressures for the expansion of private retirement savings focused primarily on preexisting supplementary pension provision. As these schemes started to face financial difficulties, and new types of pension products from the financial services industry threatened, trade unions representing skilled and less skilled workers allied with each other and with the industrial segments of business to preserve preexisting occupational plans. They did so by extending them to the whole of the workforce, thereby also reducing inherited dualisms in coverage of private




pensions. The difference between the two countries lay in the means organized labor use in pursuing its strategy: whereas in Britain’s voluntary and very decentralized system of industrial relations unions had to resort to legislative intervention, French unions could still achieve their aims using relatively centralized collective bargaining. We now turn to two country cases in which statutory social insurance was historically much more generous and occupational pensions played a lesser role.

Germany

Unfavorable demographic development, due to relatively low fertility rates since the 1960s and increased longevity, coupled with adverse labor market developments and the huge costs placed on the statutory pension insurance as a result of German unifica-tion, provided the socioeconomic underpinning for pension reforms in the late 1990s. High unemployment in the Eastern parts of Germany and the transfer of the West German pension system to the East led to a significant increase in social insurance contributions, which was said to undermine the competitiveness of German companies in an ever increasing global economy. A debate on the competitiveness of Germany as a business location (Standortdebatte) raged for most of the 1990s.77 Political parties eventually “agreed” that the contributions to the old-age social insurance scheme should be capped. The CDU/CSU (Christian Democratic Union/Christian Social Union) proclaimed in their 1998 election platform: “The costs levied on work are too high in Germany. We will continue to comprehensively reform our social security system toward enhancing personal responsibility and private arrangements as well as strengthening efficiency.”78

The rationale stated by the Social Democrats (SPD) for the 2001 pension reform, which included partial privatization, was to share the burden of demographic change equally among generations as well as to encourage more personal responsibility.79 Although it argued for expansion of the old-age social insurance to certain groups, such as the self employed, the Social Democrats’ 1998 election campaign manifesto also highlighted the need to expand fully funded private and occupational schemes in the future.80 Walter Riester, SPD minister for labor and social affairs (until 2002), and architect of the comprehensive pension reform of 2001, stated in parliament: “As nec-essary and as painful as it was in the past to indicate that the statutory pension system alone can no longer guarantee the achieved living standard . . . , we can declare today that those who participate [in private or occupational plans] will have a significantly higher overall old-age income.”81

Thus the pension debate did not occur in a political vacuum, but was embedded in a broader debate about economic competitiveness. In addition to employers and employer associations,82 the financial services industry was key in pushing for the privatization of pension provision since the mid- to late 1990s. As highlighted by Hockerts,83 the Federal Association of German Investment Companies (Bundesverband Deutscher Investmentgesellschaften) as well as DB Research (subsidiary of Deutsche Bank) were crucial for the reform of 2001.84 Among other instruments the financial services industry used media campaigns very effectively.




Labor unions, with the exception of the traditionally more accommodating Union for Mining and the Chemical and Utilities Sectors (IG BCE), were opposed to any comprehensive reform of the statutory pension system.85 Although not in favor of private individual pension plans to “compensate” for the planned cutbacks in the pub-lic scheme, they supported the overall thrust of expanding voluntary occupational old-age provision and proposed that it should be integrated more comprehensively into collective bargaining agreements.86 Even before the 2001 reform, the IG BCE negoti-ated a collective occupational pension agreement covering all workers in the sector.

Once the powerful Metal Sector Union (IG Metall) conceded that unions could not stop comprehensive pension reform, it pushed for collective and encompassing occu-pational pension agreements at the sector level. IG Metall signed a 2001 industrywide collective agreement, similar to the collective pension agreement covering workers in the chemical industry, creating the Metall Rente. The scheme’s aim was to offer the possibility of occupational pension coverage to all workers, especially for workers in SMEs that in the past were unable to set up their own schemes. Indicating his union’s continued ambition to set the pace for other industries, the president of the IG Metall, Klaus Zwickel, declared that the collective agreement constituted “a qualitative leap into the future for collective bargaining. We are shaping the future with it.”87 The union added that: “The conditions are much more attractive than those offered by banks and insurance companies. With the Metall Rente, IG Metall has achieved more fairness and justice for workers in small and medium-sized companies, who so far largely had no access to complementary occupational pension arrangements.” Despite the increased possibility of opt-outs for struggling companies in collective bargaining agreements, the collective agreement governing occupational pensions allows opt-outs only if they are more generous for the workers than the Metall Rente.88

Belgium

In Belgium, both financial lobbies and employers’ associations started pushing for pension reform in the early 1980s, but, as in Germany, financiers’ efforts to promote pension privatization targeted the relatively generous statutory pension system, rather than preexisting supplementary schemes, as was the case in Britain and France. Whereas employers—including the powerful export-oriented manufacturers in Belgium’s small open economy89—were concerned about reducing the impact of pub-lic pensions on rising nonwage labor costs, insurance companies emphasized the nec-essary “complementarity” between public and private provision and called for a “three pillar” system in which both occupational schemes and individual retirement savings accounts would play an expanded role.90 A Catholic-Liberal government legislated the creation of voluntary personal pensions in 1986. In addition, over the 1980s and 1990s, Catholic-Liberal and Catholic-Socialist coalition governments gradually reduced the generosity of public pensions, in part through a relatively invisible process of institu-tional change: by freezing the ceiling on pensionable earnings, they slowly trans-formed Belgian statutory pensions into a basic benefit that failed to maintain the living standards of high-income and middle-income earners.91




Trade union confederations of all stripes—such as the Christian-democratic ACV/CSC, the socialist ABVV/FGTB and the liberal ACLVB/CGSLB92—tried unsuccess-fully to resist these developments.93 They were also initially very skeptical about increasing the role of occupational schemes, which were traditionally fully controlled by employers who used them to retain their most valued workers, generally white-collar and high-skilled, and thereby dualized the workforce. Unions demanded that occupational pensions be subject to collective bargaining and that they be granted a right of involvement in their administration. Moreover, they wanted government regu-lations to improve the portability of accrued rights and to limit employers’ capacity to require that workers complete a minimum number of years of service in order to become eligible for a pension. Government actors held discussions on these issues with the social partners from the late 1980s; but because of employers’ resistance, legislative changes that met unions’ demands were introduced only in 1995.94 Soon afterward, people close to organized labor—such as Greta D’Hondt, a Flemish Christian-Democratic MP and former general-secretary of the Christian ACV/CSC union—floated the idea of expanding occupational pensions, provided that they were “collectively generalized to all workers,” that is, to blue-collar and less skilled workers.95

As in Germany, the metalworking industry provided a powerful stimulus to this conception. In 1999, the metalworkers’ unions and employers’ association Fabrimetal (renamed Agoria in 2000) signed a collective agreement creating a mandatory sector-wide defined-contribution plan for all the industry’s blue-collar workers, only about 15 percent of whom were then covered by a company pension scheme.96 Not only was the pension fund to replace workers’ wages; the plan also contained “solidarity clauses,” as a result of which employees would receive pension contributions during periods of inactivity, such as sickness, temporary unemployment, or maternity. The plan was to be coadministered on a not-for-profit basis by employers and unions. In fact, rather than negotiating this scheme just for themselves, both the metal lobby and the metalworkers’ unions intended to set the pace for further industry-level agreements that could eventually result in a generalization of occupational pensions.97 They also hoped that negotiations on supplementary schemes could help revitalize the Belgian system of collective bargaining at a time when the state increasingly intervened in the determination of wages.98

Nevertheless, whereas the German metalworking industry created its sectorwide scheme only after relevant legislation was introduced, in Belgium the opposite was true. The Belgian metalworking industry’s collective agreement coincided with the 1999 negotiations to form a new federal government. Trade unions and Fabrimetal approached some of the negotiators to request changes in existing regulations for occupational plans so as to implement their specific conception, and a new Socialist minister of social affairs, Frank Vandenbroucke, pledged to respond to their demands. The Vandenbroucke law on supplementary pensions, eventually enacted in 2003, introduced important incentives for the expansion of encompassing and collectively negotiated occupational schemes. The government agreed to offer specific tax advan-tages to occupational plans that contained “solidarity clauses” such as those negotiated




in the metalworking industry.99 Individual companies were allowed to opt out of industrywide schemes only if they offered a more generous plan. To stimulate negotia-tions on the issue, the government agreed to exclude contributions to occupational plans from a state-imposed wage norm. In 2001, it also persuaded all peak-level trade union confederations and employers’ associations—which play an important role in Belgium’s centralized system of collective bargaining—to issue a declaration calling on the industry-level social partners to help “democratize” supplementary pensions by “introducing industrywide social pension plans in as many sectors as possible.”100

To summarize, in both Belgium and Germany, campaigns for pension privatization focused their attention especially on the need to cut the generosity of public pensions, since these traditionally played a dominant role in workers’ retirement provision. However, as governments were increasingly committed to expanding private retire-ment savings through either individual or occupational plans, and organized labor was unable to block that development, both Belgian and German metalworkers’ unions decided to promote the expansion of collectively negotiated industrywide schemes that could cover workers whatever their skill level and whatever the size of their com-pany. That strategy did not lead to growing political divisions with other segments of labor but, instead, set the pace for similar agreements in other sectors. Nevertheless, a major difference between the two countries is that German metalworkers started actively promoting their strategy only after the government had already set out its own vision, while in Belgium they were the ones who brought their conception to the gov-ernment’s agenda and were therefore able to shape legislation in a more favorable way.

Conclusion

In this article, we have shown that the recent rise of private retirement savings in Western Europe has pushed different segments of organized labor to increase coopera-tion with one another to extend coverage of supplementary pensions to as many work-ers as possible. As unions have proved incapable of stopping the trend toward retrenchment and privatization of pensions, they have tried to mitigate its conse-quences and to avoid dualization, either by making coverage of preexisting supple-mentary pension plans compulsory, where such schemes already played a significant role in pension provision during the postwar period, or, where public provision was traditionally dominant, by negotiating the creation of encompassing sectorwide schemes, in the hope that they would eventually cover all industries. We have illus-trated the first pattern with case studies of Britain and France and the second one with an analysis of reforms in Germany and Belgium, and the literature suggests that simi-lar developments in the pensions policy area have occurred in other countries. For example, Green-Pedersen has shown that, in Denmark, where workers traditionally received a basic noncontributory “national pension,” the metalworkers’ union and its counterpart on the employers’ side set the pattern in 1991 for the introduction of indus-trywide schemes that now cover almost the whole Danish workforce.101

Unions’ increased cooperation in response to pension privatization seems to be an exception to the growing conflicts and dualisms within labor to which recent studies




of institutional change in affluent market economies have called attention. By high-lighting this exception, we seek to contribute to the comparative political economy literature. We certainly do not mean to say that different segments of labor do not have distinct interests. Indeed, our study of the politics of pension privatization suggests that trade unions representing high-skilled workers or the core industrial sectors of the economy had their own, and not necessarily altruistic, motives in supporting the exten-sion of supplementary pensions to the whole of the workforce. Thus, in countries where occupational pensions already played a large role, such unions were largely motivated by an interest in defending schemes from which their members historically benefited the most. By contrast, in countries with traditionally dominant but shrinking public pensions, the metalworkers unions’ decision to push for the expansion of indus-try-level collective negotiated schemes can also be seen as driven by their willingness to maintain their role as a pacesetter for the rest of the economy.

Nevertheless, we believe that our analysis has three broader implications for future research on trade union involvement in the politics of institutional change in capital-ism. First and most directly, political scientists should be careful not to assume that intra-labor cleavages necessarily translate into trade union conflict and egoism, par-ticularly in a context of economic liberalization and welfare state retrenchment. As highlighted by Thelen and Kume, “a strong opponent is often quite useful for unions needing to forge an external consensus across workers of different skill levels.”102 In the specific case of pensions, plans by the financial services industry and some politi-cians to turn retirement provision into a commodity have certainly helped antagonize and unite different parts of the labor union movement. Only a better understanding of the specifics of each policy area as well as further empirical research can show whether similar dynamics have been observed beyond the field of old-age pensions.

Second, when analyzing the role that workers—and employers—in the core manu-facturing industries play in current processes of institutional change, researchers should distinguish much more explicitly between the interests and attitudes of actors at the plant level and those of the industry-level associations that represent them. Palier and Thelen suggest that dualistic pressures in industrial relations have come primarily from the increased delegation of issues to company-based or plant-level bargaining.103 However, their analysis is less clear about whether trade union and employer federations in the metalworking industries have willingly or unwillingly fostered this “inward turn.” Our evidence reveals that they have not lost their tradi-tional willingness to set the pace for the rest of the economy. As industry-level associa-tions, they may have their own organizational interest in the survival of more centralized forms of collective bargaining.104 This is a question that should be investi-gated in the future.

Finally, and related to the previous point, researchers should also distinguish between the intentions of organized interests and their capacity to accomplish their aims. Although trade unions may see collectively negotiated schemes as a way of bringing about “social security through industrial agreements,”105 do they still have the means to achieve this goal? Here, political alliances and the role of the state appear to be of utmost importance. In the four cases analyzed in this article, unions’ alliances




with left-wing parties and employers from the manufacturing industry were crucial in helping them to push their strategy both in the political arena and in the industrial rela-tions system. Moreover, as has already been highlighted by Martin and Thelen,106 collective bargaining’s capacity to achieve egalitarian aims hinges on the arsenal that the state can use to support coordination. The history of the French system of pay-as-you-go occupational pensions shows how important the state’s role is in extending coverage of these schemes to the whole workforce. Whereas in Belgium the newly negotiated industry-level collective agreements on supplementary pensions have been extended erga omnes, it is unclear whether the lack of such state support in Germany, and the principle of collective bargaining autonomy, will allow German unions to achieve satisfying coverage.

Acknowledgements

For comments on previous versions of this manuscript, we would like to thank Christian de Visscher, the editorial board of Politics & Society, and the participants of the Twentieth International Conference of Europeanists (Amsterdam, June 2013), the ISPOLE general semi-nar (Louvain-la-Neuve, September 2013), and the Twelfth Annual ESPAnet Conference (Oslo, September 2014). Marek Naczyk is also grateful for Cathie Jo Martin’s and David Rueda’s comments on his doctoral thesis, which has provided much of the material for the present article.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors received no financial support for the research, authorship, and/or publication of this article.

Notes

1. Dennie Oude Nijhuis, “Revisiting the Role of Labor: Worker Solidarity, Employer Opposition, and the Development of Old-Age Pensions in the Netherlands and the United Kingdom,” World Politics 61, no. 2 (2009): 296–329; Silja Häusermann, The Politics of Welfare State Reform in Continental Europe: Modernization in Hard Times (New York, Cambridge University Press, 2010).

2. Bruno Palier and Kathleen Thelen, “Institutionalizing Dualism: Complementarities and Change in France and Germany,” Politics & Society 38, no. 1 (2010): 119–48.

3. For example, not all workers are covered by generous supplementary plans. Moreover, private—and more and more individualized—benefits tend to reflect more directly workers’ increasingly fragmented careers. See Jacob Hacker, The Great Risk Shift: The Assault on American Jobs, Families, Health Care and Retirement (New York: Oxford University Press, 2006); Karl Hinrichs and Matteo Jessoula, Labour Market Flexibility and Pension Reforms: Flexible Today, Secure Tomorrow? (Houndmills, UK: Palgrave Macmillan, 2012); Martin Seeleib-Kaiser, Adam Saunders, and Marek Naczyk, “Shifting




the Public-Private Mix: A New Dualization of Welfare?” in Patrick Emmenegger, Silja Häusermann, Bruno Palier, and Martin Seeleib-Kaiser, eds., The Age of Dualization: The Changing Face of Inequality in Deindustrializing Societies (New York: Oxford University Press, 2012), 151–75.

4. Emmenegger, Häusermann, Palier, and Seeleib-Kaiser, eds., The Age of Dualization; Kathleen Thelen, “Varieties of Capitalism: Trajectories of Liberalization and the New Politics of Social Solidarity,” Annual Review of Political Science 15 (2012): 137–59. Kathleen Thelen, Varieties of Liberalization and the New Politics of Social Solidarity (New York: Cambridge University Press, 2014).

5. Karen M. Anderson and Traute Meyer, “Social Democracy, Unions, and Pension Politics in Germany and Sweden,” Journal of Public Policy 23, no. 1 (2003): 23–54.

6. Jelle Visser, “Union Membership Statistics in 24 Countries,” Monthly Labor Review 129, no. 1 (2006): 38–49.

7. Bernhard Ebbinghaus and Jelle Visser, The Societies of Europe: Trade Unions in Western Europe since 1945 (Houndmills, UK: Macmillan, 2000).

8. Walter Korpi, The Democratic Class Struggle (London: Routledge & Kegan Paul, 1983); Walter Korpi, “Power Resources and Employer-centered Approaches in Explanations of Welfare States and Varieties of Capitalism: Protagonists, Consenters, and Antagonists,” World Politics 58, no. 2 (2006): 167–206.

9. Kathleen Thelen, Union of Parts: Labor Politics in Postwar Germany (Ithaca, NY: Cornell University Press, 1991); Kathleen Thelen, “West European Labor in Transition: Sweden and Germany Compared,” World Politics 46, no. 1 (1993): 23–49; Lucio Baccaro and Richard M. Locke, “The End of Solidarity? The Decline of Egalitarian Wage Policies in Italy and Sweden,” European Journal of Industrial Relations 4, no. 3 (1998): 283–308.

10. Peter Swenson, “Bringing Capital Back In, or Social Democracy Reconsidered: Employer Power, Cross-Class Alliances, and Centralization of Industrial Relations in Denmark and Sweden,” World Politics 43, no. 4 (1991): 513–44.

11. Peter A. Hall and David Soskice, eds., Varieties of Capitalism: The Institutional Foundations of Comparative Advantage (Oxford: Oxford University Press, 2001); Isabela Mares, The Politics of Social Risk: Business and Welfare State Development (Cambridge: Cambridge University Press, 2003); Cathie Jo Martin and Duane Swank, “Does the Organization of Capital Matter? Employers and Active Labor Market Policy at the National and Firm Levels,” American Political Science Review 98, no. 4 (2004): 593–611; Cathie Jo Martin and Duane Swank, The Political Construction of Business Interests: Coordination, Growth and Equality (New York: Cambridge University Press, 2012).

12. David Rueda, Social Democracy Inside Out: Partisanship and Labor Market Policy in Industrialized Democracies (Oxford: Oxford University Press, 2007); Johannes Lindvall and David Rueda, “Notes and Comments: The Insider-Outsider Dilemma,” British Journal of Political Science 44, no. 2 (2014): 460–75; see also Häusermann, The Politics of Welfare State Reform; Emmenegger, Häusermann, Palier, and Seeleib-Kaiser, eds., The Age of Dualization; Silja Häusermann, Georg Picot, and Dominik Geering, “Review Article: Rethinking Party Politics and the Welfare State–Recent Advances in the Literature,” British Journal of Political Science 43, no. 1 (2013): 221–40; Paul Marx and Georg Picot, “The Party Preferences of Atypical Workers in Germany,” Journal of European Social Policy 23, no. 2 (2013): 164–78.

13. Klaus Armingeon and Giuliano Bonoli, eds, The Politics of Post-industrial Welfare States: Adapting Post-War Social Policies to New Social Risks (London: Routledge, 2006); Isabela




Mares, Taxation, Wage Bargaining, and Unemployment (New York: Cambridge University Press, 2006); David Brady, ed., Comparing European Workers Part B: Policies and Institutions. Research in the Sociology of Work, vol. 2 (Bingley, UK: Emerald Books, 2011).

14. Karen M. Anderson and Julia Lynch, “Reconsidering Seniority Bias: Aging, Internal Institutions, and Union Support for Pension Reform,” Comparative Politics 39, no. 2 (2007): 189–208.

15. Anderson and Meyer, “Social Democracy, Unions”; Silja Häusermann, “Solidarity with Whom? Why Organised Labour Is Losing Ground in Continental Pension Politics,” European Journal of Political Research 49, no. 2 (2010): 223–56.

16. Oude Nijhuis, “Revisiting the Role of Labor”; Dennie Oude Nijhuis, Labor Divided in the Postwar European Welfare State: The Netherlands and the United Kingdom (New York: Cambridge University Press, 2013).

17. Häusermann, The Politics of Welfare State Reform.18. Palier and Thelen, “Institutionalizing Dualism”; see also Anke Hassel, “The Paradox

of Liberalization: Understanding Dualism and the Recovery of the German Political Economy,” British Journal of Industrial Relations 52, no. 1 (2014): 57–81.

19. Paul Pierson, Dismantling the Welfare State? Reagan, Thatcher, and the Politics of Retrenchment (New York: Cambridge University Press, 1994); Paul Pierson, ed., The New Politics of the Welfare State (Oxford: Oxford University Press, 2001).

20. Bruno Palier, “Tracking the Evolution of a Single Instrument Can Reveal Profound Changes: The Case of Funded Pensions in France,” Governance 20, no. 1 (2007): 85–107; Mitchell A. Orenstein, Privatizing Pensions: The Transnational Campaign for Social Security Reform (Princeton, NJ: Princeton University Press, 2008).

21. Matthieu Leimgruber, Solidarity without the State? Business and the Shaping of the Swiss Welfare State, 1890–2000 (Cambridge: Cambridge University Press, 2008); Matthieu Leimgruber, “The Historical Roots of a Diffusion Process: The Three-Pillar Doctrine and European Pension Debates, 1972–1994,” Global Social Policy 12, no. 1 (2012): 24–44; Marek Naczyk, “Agents of Privatization? Business Groups and the Rise of Pension Funds in Continental Europe,” Socio-Economic Review 11, no. 3 (2013): 441–69; Marek Naczyk, “Creating French-Style Pension Funds: Business, Labour and the Battle over Patient Capital,” Journal of European Social Policy, forthcoming.

22. See Häusermann, The Politics of Welfare State Reform; see also Bernhard Ebbinghaus, “The Role of Trade Unions in European Pension Reforms: From ‘Old’ to ‘New’ Politics?” European Journal of Industrial Relations 17, no. 4 (2011): 315–31.

23. Ellen M. Immergut, Karen M. Anderson, and Isabelle Schulze, eds., The Handbook of West European Pension Politics (Oxford: Oxford University Press, 2006); Bernhard Ebbinghaus, ed., The Varieties of Pension Governance: Pension Privatization in Europe (Oxford: Oxford University Press, 2011).

24. This means that pensioners are guaranteed a set level of what they used to earn as workers and that any financial deficit in the plan is financed by the employer, not by the workers.

25. Naczyk, “Agents of Privatization.”26. Immergut, Anderson, and Schulze, The Handbook of West European Pension Politics.27. Christine Trampusch, “Industrial Relations as a Source of Solidarity in Times of Welfare

State Retrenchment,” Journal of Social Policy 36, no. 2 (2007): 201; Christine Trampusch, “Industrial Relations as a Source of Social Policy: A Typology of the Institutional Conditions for Industrial Agreements on Social Benefits,” Social Policy and Administration 41, no. 3 (2007): 251–70; see also Alison Johnston, Andreas Kornelakis, and Costanza Rodriguez d’Acri, “Social Partners and the Welfare State: Recalibration, Privatization




or Collectivization of Social Risks?” European Journal of Industrial Relations 17, no. 4 (2011): 349–64.

28. Palier and Thelen, “Institutionalizing Dualism.”29. See also Torben Iversen, “Power, Flexibility and the Breakdown of Centralized Wage

Bargaining: Denmark and Sweden in Comparative Perspective,” Comparative Politics 28, no. 4 (1996): 399–436; Torben Iversen, Jonas Pontusson, and David Soskice, eds., Unions, Employers, and Central Banks: Macroeconomic Coordination and Institutional Change in Social Market Economies (Cambridge: Cambridge University Press, 2000).

30. Jelle Visser, “The Rise and Fall of Industrial Unionism,” Transfer: European Review of Labour and Research 18, no. 2 (2012): 129–41.

31. Lucio Baccaro and Chris Howell, “A Common Neoliberal Trajectory: The Transformation of Industrial Relations in Advanced Capitalism,” Politics & Society 39, no. 4 (2011): 521–63.

32. Ebbinghaus, “The Role of Trade Unions.”33. For example, Giuliano Bonoli and Bruno Palier, “Changing the Politics of Social

Programmes: Innovative Change in British and French Welfare Reforms,” Journal of European Social Policy 8, no. 4 (1998): 317–30; Bruno Palier, ed., A Long Goodbye to Bismarck? The Politics of Welfare Reform in Continental Europe (Amsterdam: Amsterdam University Press, 2010).

34. Leslie Hannah, Inventing Retirement: The Development of Occupational Pensions in Britain (Cambridge: Cambridge University Press, 1986), 40.

35. Richard M. Titmuss, Essays on “The Welfare State” (London: Allen & Unwin, 1958), 74.36. Paul Bridgen, “The One Nation Idea and State Welfare: The Conservatives and Pensions in

the 1950s,” Contemporary British History 14, no. 3 (2000): 83–104.37. Oude Nijhuis, Labor Divided, chap. 3; Hugh Pemberton, “The Failure of ‘Nationalization

by Attraction’: Britain’s Cross-Class Alliance against Earnings-related Pensions in the 1950s,” Economic History Review 65, no. 4 (2012): 1428–49.

38. Bernard Friot, “The Origins of French Supplementary Pension Plans: The Creation of AGIRC,” in Emmanuel Reynaud, ed., International Perspectives on Supplementary Pension: Actors and Issues (New York: Quorum Books, 1996), 41–48; Jacques Marseille, ed., L’UIMM, cent ans de vie sociale (Paris: UIMM/Adase Editeur, 2000).

39. Karl Hinrichs, “New Century—New Paradigm: Pension Reforms in Germany,” in Giuliano Bonoli and Toshimitsu Shinkawa, eds., Ageing and Pension Reform around the World (Cheltenham, UK: Edward Elgar, 2005), 47–73.

40. Johan De Deken, “Belgium: The Paradox of Persisting Voluntarism in a Corporatist Welfare State,” in Ebbinghaus, ed., The Varieties of Pension Governance, 57–88.

41. Tobias Wiss, Der Wandel der Alterssicherung in Deutschland: Die Rolle der Sozialpartner (Wiesbaden: VS Verlag, 2011), 209–12.

42. Henri Lewalle, “Les pensions légales et complémentaires,” Courrier Hebdomadaire du CRISP, no. 1131–32 (1986), 28.

43. Ebbinghaus, ed., The Varieties of Pension Governance.44. Paul Pierson, Dismantling the Welfare State, 58–59.45. Center for Policy Studies, Personal and Portable Pensions—For All (London: Centre for

Policy Studies, 1983), 1.46. Contrary to defined-benefit schemes (see note 2), such plans offer individuals only what

they have paid into the system, plus returns.47. “Portable Pensions: Norman Fowler Wants to Know What You Think,” Financial Times

(January 7, 1984).




48. Giuliano Bonoli, The Politics of Pension Reform: Institutions and Policy Change in Western Europe (Cambridge: Cambridge University Press, 2000), 65–83.

49. “Your Savings and Investment: Dangers in the Pension Jungle,” Financial Times (June 9, 1984).

50. See, e.g., Nigel Lawson, The View from No. 11: Memoirs of a Tory Radical (London: Bantam Press, 1992), 368; 588–92.

51. Frank Field, “Squaring the Pensions Circle,” Guardian (July 12, 1993).52. Frank Field and Matthew Owen, Private Pensions for All: Squaring the Circle (London:

Fabian Society, 1993).53. Isabelle Schulze and Michael Moran, “United Kingdom: Pension Politics in an Adversarial

System,” in Immergut, Anderson, Schulze, eds., The Handbook of West European Pension Politics, 49–96.

54. Hugh Pemberton, Pat Thane, and Noel Whiteside, eds., Britain’s Pensions Crisis: History and Policy (Oxford: Oxford University Press, 2006).

55. Paul Bridgen and Traute Meyer, “When Do Benevolent Capitalists Change Their Mind? Explaining the Retrenchment of Defined-Benefit Pensions in Britain,” Social Policy and Administration 39, no. 7 (2005): 764–85.

56. “Shattered Dreams,” Money Marketing (February 28, 2002).57. “TUC to Hit Bosses in the Pensions,” Pensions Week (May 13, 2002); John Monks,

“Compelling Case for More Compulsion,” Pensions Week (June 17, 2002); Trade Unions Council, Prospects for Pensions: A TUC Discussion Document (London: Trades Union Congress, 2002).

58. “Unions Defeat Leadership on Pensions,” Financial Times (October 3, 2003).59. “Blair Seeks to Reassure Unions over Job Rights,” Financial Times (September 13, 2004).60. Traute Meyer and Paul Bridgen, “Business, Regulation and Welfare Politics in Liberal

Capitalism,” Policy and Politics 40, no. 3 (2012): 387–403.61. “Employer Pension Compulsion May Be Ruled Out,” Financial Times (November 6,

2002).62. “A Time to Save—Pensions,” Economist (September 3, 2005).63. “Tories Back Pension Demand on Employers,” Financial Times (March 18, 2006).64. Paul Bridgen and Traute Meyer, “Exhausted Voluntarism: The Evolution of the British

Liberal Pension Regime,” in Ebbinghaus, ed., The Varieties of Pension Governance, 265–92.

65. Leimgruber, “The Historical Roots of a Diffusion Process.”66. Denis Kessler and Dominique Strauss-Kahn, L'épargne et la retraite : L'avenir des retraites

préfinancées (Paris: Economica, 1982).67. Ebbinghaus, ed., The Varieties of Pension Governance.68. See Naczyk, “Agents of Privatization”; Marek Naczyk and Bruno Palier, “Promoting

Funded Pensions in Bismarckian Corporatism?” in Ebbinghaus, ed., The Varieties of Pension Governance, 89–118.

69. “Les difficultés des retraites complémentaires,” Le Monde (December 29, 1984).70. For example, Denis Kessler, “L’avenir des retraites,” Economie et Statistique, no. 233

(June 1990): 3–8; “Le cri d’alarme de l’INSEE sur les retraites provoque de vives reac-tions,” Le Monde (July 26, 1990).

71. “La préparation d'un nouveau PER : Epargne ou retraite ?” Le Monde (June 6, 1989).72. “Retraites complémentaires : Le patronat ajourne les négociations sur l’ARRCO,” Les

Echos (December 29, 1992).73. Häusermann, The Politics of Welfare State Reform.




74. “Retraite des cadres: Les mesures d’économies se précisent,” Les Echos (December 16, 1993).

75. For example, “Dans une lettre adressée a M. Périgot, M. Bébéar proteste proteste contre l'accord sur la retraite des cadres,” Le Monde (March 6, 1994).

76. Naczyk and Palier, “Promoting Funded Pensions,” 111.77. Martin Seeleib-Kaiser, Globalisierung und Sozialpolitik. (Frankfurt/Main: Campus, 2001).78. CDU/CSU, Wahlplattform von CDU und CSU (Berlin: CDU, 1998), 4.79. See Christian Marschallek, “Die ‘schlichte’ Notwendigkeit’ privater Altersvorsorge. Zur

Wissenssoziologie der deutschen Rentenpolitik,” Zeitschrift für Soziologie 33, no. 4 (2004): 285–302.

80. SPD, Arbeit, Innovation und Gerechtigkeit—SPD Programm für die Bundestagswahl 1998, Antrag 4 in der Fassung der Antragskommission (Bonn: Parteivorstand, 1998), 28–29.

81. Deutsches Bundestag, Stenografischer Bericht, Plenarprotokoll 14/147, 14428.82. Simon Hegelich, Reformkorridore des deutschen Rentensystems (Wiesbaden: VS Verlag,

2006).83. Hans-Günter Hockerts, Der deutsche Sozialstaat. Entfaltung und Gefährdung seit 1945

(Göttingen: Vandenhoeck & Ruprecht, 2011), 307–10.84. See also Diana Wehlau, Lobbzismus und Rentenreform. (Wiesbaden: VS Verlag, 2009),

159–311.85. Wiss, Der Wandel der Alterssicherung, 153.86. See Martin Seeleib-Kaiser, Adam Saunders, and Marek Naczyk, “Social Protection

Dualism, De-industrialization and Cost Containment,” in David Brady, ed., Comparing European Workers Part B: Policies and Institution, Research in the Sociology of Work, vol. 22 (Bingley, UK: Emerald, 2011), 83–118.

87. “Pressemitteilung der IG Metall Nr. 100/2001—IG Metall und Gesamtmetall gründen Metaller-Versorgungswerk” (September, 4, 2001; online at http://www.metallrente.de/DE/_content/pdf/presse/mitteilungen/010904igmversorgungswerk_gruendung.pdf; accessed June 15, 2013).

88. For the various collective bargaining agreements see “Tarifverträge der IG Metall in Baden-Württemberg im Wortlaut” (online at http://www.bw.igm.de/tarife/?start=20; accessed August 15, 2014).

89. Claude Carbonnelle, Un combat pour l’entreprise : Jacques De Staercke, 15 ans de poli-tique de Fabrimétal (Paris: Duculot Perspectives, 1987).

90. UPEA, L’Assurance en Belgique 1982/83 (Bruxelles: Union Professionnelle des Entrerprises d’Assurance, 1983).

91. De Deken, “Belgium: The Paradox of Persisting Voluntarism.”92. Bob Hancké, “The Crisis of National Unions: Belgian Labor in Decline,” Politics &

Society 19, no. 4 (1991): 463–87.93. Etienne Arcq and Pierre Blaise, “Histoire politique de la sécurité sociale en Belgique,”

Revue belge de sécurité sociale 3 (1998): 481–714.94. Karen M. Anderson, Sanneke Kuipers, Isabelle Schulze and Wendy van den Nouland,

“Belgium: Linguistic Veto Players and Pension Reform,” in Immergut, Anderson, and Schulze, eds., The Handbook of West European Pension Politics, 332.

95. “Eensgezindheid over noodzaak aanvullend bedrijfspensioen groeit,” De Financieel Economische Tijd (October 10, 1997).

96. “Belgium Gears Up Industry-Wide,” Investment and Pensions Europe (September 1, 1999).97. Agoria, “Le fonds de pension du Métal,” internal memo, PTF/VBV, 3.67 (November 22, 2000).98. Anke Hassel, Wage Setting, Social Pacts and the Euro: A New Role for the State

(Amsterdam: Amsterdam University Press, 2006), 203–06.


http://www.metallrente.de/DE/_content/pdf/presse/mitteilungen/010904igmversorgungswerk_gruendung.pdf

http://www.metallrente.de/DE/_content/pdf/presse/mitteilungen/010904igmversorgungswerk_gruendung.pdf

http://www.bw.igm.de/tarife/?start=20



99. The law also prohibited occupational schemes from excluding part-time workers from the list of beneficiaries.

100. Frank Vandenbroucke, “Déclaration commune stimulant les pensions complémentaires comme élément d’une politique de pension sociale” (July 12, 2001; online at http://oud.frankvandenbroucke.be/html/soc/Zbijlage010713.htm; accessed June 10, 2013).

101. Christopher Green-Pedersen, “Denmark: A ‘World Bank’ Pension System,” in Immergut, Anderson, and Schulze, eds., The Handbook of West European Pension Politics, 480–84; on collectively negotiated schemes in the Nordic countries, see also Christine Trampusch, “Employers and Collectively Negotiated Occupational Pensions in Sweden, Denmark and Norway: Promoters, Vacillators and Adversaries,” European Journal of Industrial Relations 19, no. 1 (2013): 37–53.

102. Kathleen Thelen and Ikuo Kume, “The Effects of Globalization on Labor Revisited: Lessons from Germany and Japan,” Politics & Society 27, no. 4 (1999): 498.

103. Palier and Thelen, “Institutionalizing Dualism.”104. On organizational interests see also Philippe C. Schmitter and Wolfgang Streeck, “The

Organization of Business Interests: Studying the Associative Action of Business in Advanced Industrial Societies,” MPIfG discussion paper, no. 99/1 (1999). Johan Davidsson and Patrick Emmenegger, “Defending the Organisation, Not the Members: Unions and the Reform of Job Security Legislation in Western Europe,” European Journal of Political Research 52, no. 3 (2013): 339–63; Thomas Paster, “Why Did Austrian Business Oppose Welfare Cuts? The Role of Organizational Structures in Shaping the Attitudes of Economic Interest Groups towards Social Policy Retrenchment,” Comparative Political Studies 47, no. 7 (2014): 966–92; Patrick Emmenegger, The Power to Dismiss: Trade Unions and the Regulation of Job Security in Western Europe (Oxford: Oxford University Press, 2014); Patrick Emmenegger, “The Politics of Job Security Regulations in Western Europe: From Drift to Layering,” Politics & Society 43, no. 1 (2015): 89–118.

105. See Trampusch, “Industrial Relations as a Source of Solidarity.”106. Cathie Jo Martin and Kathleen Thelen, “The State and Coordinated Capitalism:

Contributions of the Public Sector to Social Solidarity in Postindustrial Societies,” World Politics 60, no. 1 (2007): 1–36.

Author Biographies

Marek Naczyk ([email protected]) is a postdoctoral research officer at the Oxford Institute of Social Policy and research associate at the Centre d’études européennes and the LIEPP, Sciences Po. Previously he was a postdoctoral research fellow at the Oxford Institute of Social Policy. His work focuses on the politics of pension privatization in OECD countries and on the links between pension reform and corporate governance reform. His work has appeared in the Socio-Economic Review and is forthcoming in Governance: An International Journal of Policy, Administration, and Institutions and the Journal of European Social Policy.

Martin Seeleib-Kaiser ([email protected]) is Barnett Professor of Comparative Social Policy and Politics at the Oxford Institute of Social Policy and Professorial Fellow at St Cross College, University of Oxford. Previously he has held posts at the universities of Bremen and Bielefeld as well as Duke University. The main focus of his research is political and histori-cal sociology with an emphasis on comparative social policy and welfare state analysis. His articles have been published in journals such as American Sociological Review, Comparative Political Studies, Journal of European Social Policy, Politische Vierteljahresschrift, Social Politics, West European Politics, and Zeitschrift für Soziologie.


http://oud.frankvandenbroucke.be/html/soc/Zbijlage010713.htm

http://oud.frankvandenbroucke.be/html/soc/Zbijlage010713.htm




Documents

Solidarity against All Odds: Trade Unions and the Privatization of Pensions in the Age of Dualization