• Systemic Danger? The Effects of the Financial Crisis on Private Pensions.

  • Richard Detje | 21 Jan 10
  • Richard Detje authored the study on „Systemic Danger? The Effects of the Financial Crisis on Private Pensions“ on behalf of transform! europe. So far it has been published in German and French. With its publication in English we are launching a new format of our print medium, the special editions, in which we will at irregular intervals provide relevant materials and documents for the left discourse – an undertaking supplementing the transform!magazine, which is being published in eight languages every half a year. The special editions will primarily be published in English, but occasionally also in other languages. They can be from the coordination office.

    Financial crisis & private pensions

    At the beginning of the current financial crisis – i.e. a crisis of a finance led accumulation regime – in 2007 and early 2008, declining banks and stock markets have been the focus of attention. In the U.S. already in this early stage, in Europe beginning with the end of summer 2008, the sharp downturn of the business cycle indicated a second source of what can be characterised as a double crisis. The consequences are: growing mass unemployment and tightened pressure on wages, henceforth deteriorating living conditions. The double economic crisis transformes more and more into a social crisis.

    In this social crisis one crucial point is almost ignored: the future of private pensions. For reasons easy to understand: insurance companies, banks and private pension funds who deal with these assets are not at all interested in reports about the instability of private pension funds. Therefore empirical analysis is rare. In the following we will present some main findings about the consequences of the financial crisis on funded pensions and argue for a (re-) strengthening of publicly organized and controlled pensions systems.

    Download pdf on the right (969 KB).