Innenansichten eines Wohlfahrtsmarkts

The 2001 pension reform act (“Riester reform”) has recast old-age security in Germany by placing more emphasis on private provisions. The new policy draws on markets and competitive structures in social welfare, as done earlier in long-term care and in public utilities. In the social welfare sector in Germany, such privatisation mostly goes hand in hand with a far-reaching “social” regulation of markets. Old-age pensions are the most recent case in point. For the first time, financial markets figure as welfare markets. This is done in the politically most sensitive sector of the German welfare state, old-age security. In theoretical terms, we interpret the change as a structural transformation of German “social capitalism”. Empirically, we investigate the structure of the new welfare market and the attitudes of the providers, based on a survey of all providers of private pensions in Germany. The findings include: (1) Markets can produce the welfare good “income security in old-age” only by way of a complex arrangement of three markets – financial markets, pension markets and markets for financial consultancy services. (2) The pension reform of 2001 has given rise to a new welfare market: an old-age pension market as a distinct sub sector of the wider market for financial investment and saving. The pension market constitutes a new field of business, with new actors, new products and new arenas of competition. The new market is created and shaped by politics. (3) The new private pension market combines market principles with welfare state principles. The providers conceive of their business as contributing to social security, and they recognise that the state sustains and structures the market.