Just as national pension programs have been expanded and liberalized during the postwar period, so also have employer pension plans been extended to more and more workers. Whereas before the war, employer plans were usually found only in a relatively small number of large companies, in some industrial countries today, one-half or more of workers in the private sector are covered by employer pension plans. Moreover, tax exemption of contributions to employer pension plans is a common practice and has played an important role in stimulating adoption of these plans.

The proportion of retired workers who actually receive benefits from employer pensions, however, tends in most countries to be considerably smaller than the proportion of employed workers who are covered, not only because workers in relatively new plans may not have had enough years of service to qualify for a pension, but also because workers who change jobs often lose all or part of their pension rights. In fact, as the coverage of employer pension plans has increased, there has been increasing awareness of many weaknesses in the protection they offer workers, and a growing movement for governments to enact regulatory legislation designed to overcome at least some of these weaknesses.

Before discussing the major issues relating to pension plans, a word about nomenclature is in order. In the United States, we usually refer to employer-sponsored plans as “employer” plans or “private” plans, whereas in Western Europe they are often called “occupational” plans. I propose to refer to them usually as employer plans because I believe that this will make my meaning clear to all readers. Even so, there is ambiguity in some cases.