Deregulation as a Method to Solve the Pension Insurance Funding Problem

Abstract

The author attempts to answer the question: can deregulation be a method to solve the problem of pension insurance financing? Pension insurance models and systems in EU member states since the 1970s, have shown increasing financial inefficiency, increasingly threatening the sustainability of public finances. At the same time, it is worth emphasizing that it is the financial sector and public finances that play a key role in solving socio-economic problems, and therefore social policy issues, including pension security. So, can deregulation be a method to solve the problem of pension insurance financing? Due to the limited size of the publication, the author will briefly characterize selected models of pension security financing. The problem of pension security in the European Union will also be presented, followed by the basic problem of pension finance, which is its structural debt. It is due in part to the exhaustion of the possibilities of the pay-as-you-go model, and in part to the demographic problem, which has been demonized beyond measure. Above all, however, it is due to a three-generation conceptual stagnation and reliance on 19th-century solutions, which, like other items from that period, are relics to be rightly admired, as part of the development of human thought, rather than applied almost 140 years later, in the third century since their inception. Finally, an outline will be given of the concept of deregulation of the pension system and, at the same time, the empowerment of citizens of countries that would adopt such a solution. Deregulation in itself is not a solution, but rather an element of the broader concept of healing the pension security of citizens1, the application of which could solve the existing problems of pension insurance finances. In the author’s opinion, it is worth devoting a moment of scientific reflection to this issue.