Beyond Beveridge and Bismarck: Revising the Typology of Pension Systems for the 21st Century

ABSTRACT Pension systems are a major part of welfare states which have been under reform pressures across advanced economies. Established typologies of pension systems stress the difference between Bismarckian social insurance and Beveridgean basic security principles in their historical development. During the last decades, multiple reforms due to population ageing and fiscal challenges have cut back on public pensions, raised retirement ages and promoted pension privatization and financialization, reshaping the pension landscape. Reviewing major dimensions with key indicators of pension systems, our comparative cluster analysis studies the similarities and differences across 31 OECD countries. A typology of at least four clusters describes the main types of today's pension systems: Dominant Public, Hybrid Social Insurance, Mature Multi‐pillar and Residual Public systems. While two common types derive from either the pure Bismarckian model or the Beveridgean basic security with hybrid private tiers, they no longer constitute the majority of cases. The Hybrid Social Insurance model goes beyond Bismarckian principles, whereas the Residual Public is still relatively rudimentary. Overall, past reforms towards multi‐pillarization and financialization have altered pension systems, though these are far from converging, while ongoing reforms could be more impactful for future generations than current retirees.