Old-age state social insurance in Europe: may its failure be averted?

Old-age social insurance in the European Union is facing negative long-term demographic trends, as chronically unbalanced state social insurance fund budgets put the system’s existence at risk. Various measures to save the system are being employed, undermining people’s sense of security about their future retirement, which is the main goal of the system. The flaws of the public pension schemes suggest that failure is a possible outcome of the unfunded nature of the schemes. The paper examines the characteristics, historic financial trends, and flaws of old-age social insurance and assesses the various options to save the system from failure.