Objectives of pension systems

Abstract

An evaluation of pension policies – especially in a comparative research design – requires a clearly defined set of objectives as benchmark for the performance of the implemented systems. Therefore it is necessary to introduce some essential terms and definitions as well as disclose the criteria of evaluation on which the analysis relies. This chapter begins with answering the fundamental questions ‘what is a pen- sion system?’ and ‘why do we need a pension system?’. Subsequently, section 2.3 focuses on further terms of central importance for this study, i.e. the different ap- proaches to distributional justice and the concept of sustainability. These thoughts lead directly to the requirement of formulating tangible objectives of pension sys- tems. Since targets need to be valid for both the German and the UK pension sys- tem, the formulation refers to the commonly agreed objectives within the EU Treaty and to the ‘Open Method of Co-ordination’ in the field of pensions.