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Thursday, 20 November 2014

What are the politics of flat pensions in Canada and the UK?

by Daniel Béland and Alex Waddan

This recent, 2014 Canadian Public Administration article explores the issue of policy change in relationship to universal flat-rate pensions created in both the UK (Basic State Pension) and Canada (Old Age Security) in the post-World War II years.

Three things to know about the development of old age security:

1.  In the field of universal public pensions, there has been more policy change in the UK than in Canada.

2.   This contrast between the development of the Basic State Pension (UK) and Old Age Security (Canada), is partially explained by the extent of social mobilization involving current and future beneficiaries.

3.   Our study suggests that adopting a long-term time frame is necessary to assess the issue of transformative yet incremental change.

Three myths about pension reform:

Myth #1: Contributory pensions such as the Basic State Pension in the UK are always more resilient politically than benefits funded out of general revenues like Old Age Security in Canada.

Reality: Our study suggests this is not necessarily the case, as Old Age security has proved more resilient than the Basic State Pension, despite the fact that the latter is contributory and the former is not.

Myth #2: Universal transfer programs like Old Age Security are facing a rapid and irremediable decline.  

Reality: Despite the adoption of a fiscal clawback in 1989, Old Age Security has proved remarkably resilient as a program and, during the Chrétien years, the only major attempt to replace it was later abandoned.

Myth #3: Contributory pension benefits are almost impossible to curtail in a direct and explicit way.

Reality: The case of pension reform in the UK during the Thatcher years suggests this is not true and that, under certain political conditions, major retrenchment is possible. 

Interested in learning more about your own public sector pension, and how it fits into your retirement planning?  Consider attending "Retirement Planning in the Public Service: Learning to Adapt to the Tides of Change", Wednesday, November 26, in Edmonton.  Click here for more information.

Daniel Béland is Professor and Canada Research Chair in Public Policy (Tier 1) at the Johnson-Shoyama Graduate School of Public Policy (University of Saskatchewan campus). He has published a dozen books and more than 90 peer-reviewed articles on fiscal and social policy, in Canada and elsewhere around the world. For more information:

Alex Waddan is a Senior Lecturer at the University of Leicester in the United Kingdom. He has published many academic papers as well as The Politics of Social Welfare (Edward Elgar), Clinton's Legacy? (Palgrave) and The Politics of Policy Change (Georgetown University Press; with Daniel Béland). For more information:

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