The open method of co-ordination: Some remarks regarding old-age security within an enlarged European Union



proves to be less significant than it seems. Therefore, in the early 90’s the Community proposed
the promotion of
convergence of member states’ social policies, while recognising and respecting
the diversity and autonomy of systems.11 The result of the convergence approach were two Coun-
cil recommendations in 1992.12 Both recommendations were based on the principles of subsidiar-
ity as implemented later in the Treaty of Maastricht in 1993.13 However, there is still no explicit
and comprehensive policy regarding national social security on the European level.14 Neverthe-
less, there are different channels by which decisions at the EU level may influence (indirectly as
well as directly) especially old-age security systems.

2. Channels influencing national old-age security at the EU level

As indicated in the previous part, the old-age security systems within EU member states and in the
candidate countries still differ not only in organisation but also in their conception: different nor-
mative ideas (Bismarck vs. Beveridge) as well as aims (maintenance of living standard vs. poverty
avoidance) resulted in conceptually different national old-age security systems that developed
over time. They have in common that they are based upon three different pillars respectively tiers.
In general, these pillars are the public old-age security system (in Germany especially the social
(statutory) pension insurance and the schemes for civil servants), and supplementary systems (in
Germany supplementary occupational schemes in the private and public sector), as well as the
additional private old-age provision (for instance due to private life insurance). Moreover, impor-
tant distinction can be made with regard to financing (pay-as-you-go vs. capital funded; contribu-
tions vs. taxes), the organisation (public vs. private), the insured persons (citizens or inhabitants
vs. specific groups, e.g. self-employed persons), and the benefits of the systems. These structural
features can relate to the three pillars and differ from member state to member state. The relevant
characteristic of the formal old-age security system is the quantitative importance of the three
different pillars.15 At present - according to the current Community law - each EU member state
is responsible for the conception of its formal old-age security system.16 Nevertheless, figure 1

within the EU are often (partly or completely) based upon these systems. A closer view on the structural
features especially of the old-age security systems will be added in the following part (2.).

11

12

13

14

15


Cf. Kommission der Europaischen Gemeinschaften (1989: 28 f.) as well as Kommission der Europaischen
Gemeinschaften (1991: 3).

The Council Recommendation (92/442/EEC) is on Convergence of social protection objectives and poli-
cies
whereas the Council Recommendation (92/441/EEC) is on Common criteria concerning sufficient re-
sources and social assistance in the social protection systems
. For comments on these aspects see Schulte
(1991); Hauser (1995) as well as Gobel (2002).

The convergence approach was supposed to be essentially flexible and multiform and is marked by similar
basics in comparison with the OMC. Cf. Gobel (2002: 131).

Cf. Schulte (2001).

Cf. Schmahl (2001: 182 ff.) as well as Schmahl (2002).

16


Cf. Schulte (2001).




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