Making people work longer. Comparing Norwegian and British reform processes, with a sidelong gaze to Sweden

A major strategy of recent pension reforms has been to promote what may be called the «working longer» policy paradigm arguing that working longer represents a win‐win strategy by addressing both the challenge of pension finance sustainability and adequacy. By working longer this extends the contribution period for pensions and reduces the period of pension payments and so helps to balance income and outlays for pensions. Adequacy and social sustainability is improved by increasing the individual earnings basis for future pension benefits and a shorter period in retirement brings higher yearly benefits. The policy measures to bring about these changes are numerous, but in this paper we will deal with two different ways of bringing the factual pension age upwards, considered to be partial substitutes (OECD, 2011): The first one is the straightforward solution of rising the normal retirement age (e.g. the UK). The second strategy is more hidden and implicit, and consists of introducing demographic adjustment factors into the system, that via expected behavioural changes will induce potential retirees to postpone their retirement. Norway (and Sweden) introduced a flexible statutory retirement age where a longevity adjustment factor ensures that people get lower pension benefits if the life expectancy of their cohort increases. A third strategy not considered here relies on a demographic factor that automatically increases the retirement age in correlation with population ageing (e.g. Denmark). This paper aims at exploring the pension reform processes in two countries and answer why countries embark on different paths toward extended working life. We also raise some critical issues regarding the consequences the policy design might have for implementation and peoples´ behaviour and adjustment to the new system. We also question the strategy of automatic stabilizers with respect to information for future pensioners about consequences of different choices and what role street‐level bureaucracies might play in making the implementation of the new pension scheme work according to its intentions, i.e. to make people work longer. Theoretically, we will follow an institutional and ideational perspective. The analysis will rely on policy documents, and interviews made with members of national pension commissions.