the functioning of PAYG government pension schemes. The only exceptions are the 1996 reform
in the Netherlands, the 1998 reform in Sweden, and the 1987 reform in the UK.
The 1996 Dutch reform consisted in the privatization of the pension fun for civil servants. The
reform carried out in Sweden in 1998 was a broad reform, that implied, inter-alia, revising the
functioning of the government PAYG pension scheme (from defined benefit to notional defined
contribution) and the gradual introduction of gradually an additional funded, defined-contribution
pillar. The 1987 UK reform introduced the possibility of opting out from the government PAYG
for joining individual private funded schemes.37 In almost all the parametric reforms considered in
table 6, elements aimed at reducing pension benefits and increasing pension contributions were
present, together with revisions in the statutory retirement age.38 The following points emerge
from the data reported in table 6. First, the evolution of the primary CAB in correspondence with
reform years were to a considerable extent driven by changes in cyclically adjusted revenues and
primary expenditures not directly related to changes in pension contributions and social benefits.
Second, the pension contributions as a share of GDP moved quite little after the reform in almost
all cases (never more than 1 GDP point between the year of the reform and the two consecutive
years). There is some indication that the evolution of social contributions differed depending on
whether reforms were mainly parametric or systemic. After all parametric reforms (except Italy
1992), social contributions increased, while in the case of the Dutch, and UK reform there was a
slight reduction in pension contributions. Third, social benefits changed quite substantially after
reforms. They fell after systemic reforms. The case of parametric reforms is instead mixed: an
increase is observed after the German reform, the two Italian reforms and the Portuguese reform,
while after the Spanish and the Finnish reform a reduction in benefits is observed. Overall, the
evidence broadly supports the expectation that the impact of reforms is likely to be quite different
depending on the specificities of the reforms considered, in particular whether they are mainly
parametric or systemic reforms.
37See http://www.frdb.org/documentazione/scheda.php?id=
=55&doc_pk=9027).
38 FRDB reports as uncertain the impact of the German reform of 1992 on pension benefits, while in all other cases
reforms are indicated as reducing benefits and increasing contributions. As for revisions in the retirement age, all
reforms include an increase in the statutory retirement age, generally introduced gradually, except for the 1995
Italian reform where the retirement age was made more flexible compared with the regime introduced in 1992.
Moreover, the Italian reforms of 1992 and 1995 were not purely parametric in that they also introduced fiscal
incentives for the accumulation of individual private pension schemes
110