Complementary retirement pensions: Towards a definition of terms

One of the main difficulties in carrying out an international comparison of retirement systems is the task of establishing clear common terminology. Like other social institutions, welfare systems differ from country to country; confusion can arise when a given word is applied to different institutional structures because such usage can mask important differences. On the basis of a comparison of complementary pension plans in the United States, Ireland, the United Kingdom, France and Germany, this paper discusses and clarifies the meanings of some key terms. The distinction between "private" and "public" retirement plans, commonly used by Americans, can be erroneously applied to other systems, particularly that of France, where complementary retirement plans resemble American "private" plans in some respects and "public" plans in others. The terms "occupational" and "supplementary", often used in Europe, can be used interchangeably; however, each one stresses different aspects of complementary plans. The terms "funding" and "pay-as-you-go" and their equivalents in French (répartition and capitalisation) have somewhat different meanings and quite different connotations. Finally, the author discusses the concept of "social insurance", as applied to both social security and complementary pension plans, to end with some reflections on the definition of what constitutes a retirement plan.