This chapter first reports the results of the investigation of the extent of retrenchment in each of the selected social-security schemes carried out as described in chapter 4 and appendix 1. The discussion of each scheme is divided into two parts. First, there will be a short description of the scheme as of 1982. Second, there will be an analysis of developments in the scheme from 1982 to 1998, based on the reported calculations of expected and actual savings. These are reported in tables. The chapter then summarises the findings of variation in retrenchment, and compares them with the hypotheses developed in chapter 4 to see to what extent the theoretical framework developed in chapter 3 has been capable of predicting the actual variation in retrenchment.

Retrenchment in Denmark and the Netherlands

The Danish old-age pension

The Danish old-age pension, ‘folkepension’, was a pension for all citizens aged 67 or more with two types of benefits. A basic amount paid to everyone regardless of other income and an income-tested pension supplement. In 1982, 49% of all pensioners received the full supplement, 19% part of it, and 32% no supplement at all (Danmarks Statistik, Statistiske efterretninger afdeling A 1982: 1282-1283). Compared to the basic amount, the supplement was of limited importance, as the maximum supplement in 1982 amounted to only 18% of the basic amount. Benefits could also be awarded to persons under the age of 67 in two cases. First, single females aged 62-67 were entitled to a pension. Second, if special, social or medical conditions were present, a pension could be awarded to people aged 55-67. In both cases, the basic amount and the pension supplement were subject to an income test. Benefits were taxable as any other income, but single pensioners were entitled to an enhanced personal tax-exemption. Thus, single pensioners living from only the national pension paid no income tax. Benefits were linked to the development in prices and tax financed on a pay-asyou- go basis.

Development of the Danish old-age pension from 1982 to 1998

Table 10 provides an overview of changes in the Danish old-age pension from 1982 to 1998 and their budgetary implications, if measurable. The main conclusion from Table 10 is that the Danish old-age pension has not been retrenched.